No: 660270

British Virgin Islands

The BVI Business Companies Act
(No. 16 of 2004)

Memorandum and Articles of Association

of
DOLPHIN CAPITAL INVESTORS LTD.

Incorporated this 7th day of June, 2005

amended on 18th July, 2005
amended on 28th July ,2005
amended on 7th December, 2005
amended on 21st June, 2007
amended on 11th February, 2011

Icaza Gonzales-Ruiz & Aleman (BVI) Trust Limited

Vanterpool Plaza
2nd Floor
Wickhams Cay 1
Road Town, Tortola
British Virgin Islands

TERRITORY OF THE BRITISH VIRGIN ISLANDS

THE BVI BUSINESS COMPANIES ACT, 2004

MEMORANDUM OF ASSOCIATION

OF

DOLPHIN CAPITAL INVESTORS LTD.

1.

Company Name

1.1

The name of the Company is DOLPHIN CAPITAL INVESTORS LTD.

1.2

The directors or members may from time to time change the Company's name by Resolution of
Directors or Resolution of Members. The directors shall give notice of such resolution to the
registered agent of the Company, for the registered agent to file an application for change of
name with the Registrar, and any such change will take effect from the date of the certificate of
change of name issued by the Registrar.

1.3

A change of name of the Company shall constitute an amendment of the Memorandum and
Articles and in the event of a resolution being passed to change the name of the Company, the
provisions below in respect of amendments to the Memorandum and Articles must be complied
with.

2.

Re-registration

2.1

The Company was first incorporated as a company on 07 June 2005 under the International
Business Companies Act, 1984 (CAP 291), and was automatically re-registered under the BVI
Business Companies Act, 2004 (the "Act") on 1 January 2007. Immediately before its reregistration under the Act the Company was governed by the International Business Companies
Act, 1984 (CAP 291).

3.

Company Limited by Shares, Liability of Members

3.1

The Company is a company limited by shares.

3.2

The liability of each member is limited to:

(a)

the amount from time to time unpaid on that member's shares;

(b)

any liability expressly provided for in the Memorandum or the Articles; and

(c)

any liability to repay a distribution pursuant to section 58(1) of the Act.

4.

Registered Office

4.1

At the date of filing of the notice of election to disapply Part IV of Schedule 2 of the Act, the
registered office of the Company was situated at the office of the registered agent which is
Vanterpool Plaza, 2nd Floor, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands.

4.2

The directors or members may from time to time change the Company's registered office by
Resolution of Directors or Resolution of Members, provided that the Company's registered office
shall at all times be the office of the registered agent. The directors shall give notice of such
resolution to the registered agent of the Company, for the registered agent to file with the
Registrar a notice of change of registered office, and any such change of registered office will
take effect from the date of the registration by the Registrar of such notice.

5.

Registered Agent

5.1

At the date of filing of the notice of election to disapply Part IV of Schedule 2 of the Act, the
registered agent of the Company was Icaza, Gonzales-Ruiz & Aleman (BVI) Trust Limited of
Vanterpool Plaza, 2nd Floor, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands.

5.2

The directors or members may from time to time change the Company's registered agent by
Resolution of Directors or Resolution of Members. The directors shall give notice of such
resolution to the registered agent of the Company (meaning the existing registered agent), for the
registered agent to file with the Registrar a notice of change of registered agent, and any such
change of registered agent will take effect from the date of the registration by the Registrar of
such notice.

5.3

If the existing registered agent does not file such notice on instruction by the directors, the
directors shall procure that a notice of change of registered agent is filed with the Registrar by a
legal practitioner in the British Virgin Islands acting on behalf of the Company, and any such
change of registered agent will take effect from the date of the registration by the Registrar of
such notice.

6.

General Objects and Powers

6.1

Subject to the following provisions of this Memorandum, the objects for which the Company is
established are unrestricted and the Company shall have full power and authority to carry out any
object not prohibited by the Act or any other law of the British Virgin Islands including but not
limited to:
i)

To carry on the business of an investment company and for that purpose to

acquire and hold either in the name of the Company or in that of any nominee shares,
stocks, debentures, debenture stock, scrip, bonds, notes, obligations, investments
and securities and warrants or options in respect of any shares, stocks, debentures,
debenture stock, scrip, bonds, notes, obligations, investments or securities.

ii)

To acquire any such shares, stocks, debentures, debenture stocks, scrip, bonds,
notes, obligations, investments or securities or warrants or options therein by original
subscription, contract, tender, purchase, exchange, underwriting, participation in
syndicates or otherwise, and whether or not fully paid up, and to subscribe for the
same subject to such terms and conditions (if any) as may be thought fit.

iii)

To exercise and enforce all rights and powers conferred by or incident to the
ownership of such shares, stock obligations or other securities including without
prejudice to the generality of the foregoing all such powers of veto or control as may
be conferred by virtue of the holding by the Company of some special proportion of
the issued or nominal account thereof and to provide managerial and other executive
supervisory and consultant services for or in relation to any company in which the
Company is interested upon such terms as may be thought fit.

iv)

To acquire and hold either in the name of the Company or in that of any nominee and
whether as principal or broker or agent any currency in any form of any part of the
world in any commodity and to enter into any contract of purchase, sale or option to
purchase or sell in respect of any such currency or commodity.

v)

To offer for public subscription any shares or stocks, in the capital of, or debentures or
debenture stock or other securities of or otherwise to establish or promote, or concur
in establishing or promoting, any company, society anonyme, association,
undertaking or public or private body.

vi)

To carry on business as capitalists, financiers, concessionaires and merchants and to

undertake and carry on and execute any other business which may seem to be
capable of being conveniently carried on in connection with any of these objects, or
calculated directly or indirectly to enhance the value of or facilitate the realization of,
or render profitable, any of the Companys property or rights.

vii)

To carry on the business of a property investment and holding Company, and for that
purpose to purchase, take on lease, or in exchange, or otherwise acquire, hold,
undertake or direct the management or work, develop the resources of, and turn to
account any estates, lands, buildings, tenements, and other real property and
property of every description, whether of freehold, leasehold, or other tenure, and
wheresoever situate, and any interests therein, and any rights connected therewith,
and to exercise and enforce all rights and powers conferred by, or incident to, the
ownership of any such property.

viii)

To sell, lease, let, mortgage, or otherwise dispose of grant rights over or otherwise
provide any such property of the Company without seeking rental or consideration for
such disposal or provision, or otherwise upon such terms as the Company shall
determine.

ix)

To acquire and assume for any estate or interest and to take options over, construct,
develop or exploit any property of the Company without seeking rental or
consideration for such disposal or provision, or otherwise upon such terms as the
Company shall determine.

x)

To acquire, trade and deal with, or hold stocks, shares, bonds, debentures, scrip,
investments and securities of all kinds issued in any country in any part of the world.
To raise and borrow money by the issue of shares stock, debentures, bonds,
obligations, deposit notes and otherwise howsoever and to underwrite any such issue
and without limiting the generality of the foregoing to secure or discharge any debt or
obligation of or binding on the Company in any manner and in particular by the issue
of debentures (perpetual or otherwise) and to secure the repayment of any money

borrowed, raised or owing by mortgage, charge, or lien upon the whole or any part of
the Companys property or assets (whether present or future).
xi)

To deposit the monies of the Company with any company or person and to advance
and lend money upon such terms as may be arranged and with or without security
and to guarantee the performance of any contract or obligation and the payment of
money of or by any person or Company, and generally to give guarantees and
indemnities including guarantees and indemnities in respect of the liabilities of
persons whether or not associated with the Company and whether or not the
Company receives any consideration therefore and to secure any such guarantee or
indemnity by the grant of charges, mortgages or liens on the whole or any part of the
Companys property or assets present or future.

xii)

To apply for, purchase or by other means acquire and protect, prolong and renew any
patents, patent rights brevets dinvention, licences, trade marks, protections or
concessions or other rights which may appear likely to be advantageous or useful to
the Company.

xiii)

To acquire and undertake on any terms and subject to any conditions, the whole or
any part of the business, property and liabilities of any person or company carrying on
any business which the Company is authorised to carry on, or possessed of property
suitable for the purposes of the Company;

xiv)

To amalgamate with or enter into partnership or any joint purchase or profit-sharing

arrangement with or to co-operate in any way with, or assist or subsidise any
company, form or person carrying on, or proposing to carry on, or possessed of
property suitable for the purposes of the Company;

xv)

To purchase with a view to closing or reselling in whole or in part any business or

properties which may seem to be deemed likely to injury by competition or otherwise
any business or branch of business which the Company is authorised to carry on, and
to close, abandon and give up any works or businesses at any time acquired by the
Company.

xvi)

To act as Directors or Managers of or to appoint Directors or Managers of any

subsidiary company or of any other company in which this company is or may be
interested.

xvii)

To make, draw, accept, endorse, discount, negotiate, execute and issue and to buy,
sell and deal in promissory notes, bills of exchange, cheques, bills of lading, shipping
documents, dock and warehouse warrants and other instruments negotiable or
transferable or otherwise.

xviii)

To lend money with or without security and to subsidise, assist and guarantee the
payment of money by or the performance of any contract, engagement or obligation
by any persons or companies.

xix)

To pay all preliminary expenses of the Company and any company promoted by the
Company or any company in which this Company is or may contemplate being
interested including in such preliminary expenses all or any part of the costs and
expenses of owners of any business or property acquired by the Company.

xx)

To enter into any arrangements with any Government or authority, imperial, supreme,
municipal, local or otherwise, or company that seem conducive to the companys
objects or any of them and to obtain from any such Government, authority, or
company and charters, contracts, decrees, rights, grants, loans, privileges or
concessions which the Company may think it desirable to obtain and to carry out,
exercise and comply with others.

xxi)

To vest in any real or personal property, rights or interest, acquired by or belonging to

the Company in any person or company on behalf or for the benefit of the Company,
with or without any declared trust in favour of the Company.

xxii)

To undertake and perform sub-contracts and to act through or by means of agents,

brokers, sub-contracts or others.

xxiii)

To remunerate any person or company rendering services to the Company, whether

by cash payment or by the allotment to him or them of shares, stocks, debentures,
bonds or other securities of the Company credited as paid up in full or in part or
otherwise.

xxiv)

To procure the Company to be registered or recognised in any part of the world

outside the British Virgin Islands.

xxv)

To distribute among the members of the Company in kind, any property of the
Company (whether by way of dividend or otherwise) and in particular any shares,
stocks, debentures, bonds or other securities belonging to or at the disposal of the
Company.

xxvi)

To do all or any of the above things in any part of the world, and either as principals,
agents, trustees, contractors or otherwise, and either along or in conjunction with
others, and either by or through agents, sub-contractors, trustees or otherwise.

xxvii)

To accept payment for any property or rights sold or otherwise disposed of or dealt
with by the Company either in cash, by instalments or otherwise, or in fully or partly
paid up shares of any company or corporation, with or without preferred or preferred
rights in respect of dividend or repayment of capital dividend or repayment of capital
or otherwise or in debentures of mortgage debentures or debenture stock, mortgages
or other securities of any company or corporation, or partly in one mode and partly in
another, and generally on such terms as the Company may determine and to hold,
dispose of or otherwise deal with any shares, stock or securities so acquired.

xxviii) To have the power exercisable solely by resolution of the Directors to vest the corpus
or the income of any trust in itself and to do all such things as may be conducive to
the attainment of such objects.
xxix)

To make such gifts or the Companys property as all members of the company in
general meeting shall decide including, without limiting the generality thereof, the
power to vest all or any part of the companys property revocable or irrevocable, in the
name of trustees for the benefit of such person or persons including the company on
such terms as all the members of the company in general meeting shall decide

6.2

6.3

The Company has no power to:

(a)

carry on banking or trust business, unless it is licensed to do so under the Banks and
Trust Companies Act, 1990;

(b)

carry on business as an insurance or as a reinsurance company, insurance agent or

insurance broker, unless it is licensed or authorised to do so under the Insurance Act,
2008;

(c)

carry on the business of company management unless it is licensed to do so under the

Companies Management Act, 1990;

(d)

carry on the business of providing the registered office or the registered agent for
companies incorporated in the British Virgin Islands unless it is licensed to do so under
the Banks and Trust Companies Act, 1990; or

(e)

carry on Investment Business or business as a Mutual Fund unless it is licensed to do so

pursuant to the Securities Investment Business Act, 2010.

Without limiting the foregoing, the powers of the Company include the power to do the following:
(a)

grant options over unissued shares in the Company and treasury shares;

(b)

issue securities that are convertible into shares;

(c)

give financial assistance to any person in connection with the acquisition of the
Company's own shares;

(d)

issue debt obligations of every kind and grant options, warrants and rights to acquire debt
obligations;

(e)

guarantee a liability or obligation of any person and secure any of its obligations by
mortgage, pledge or other charge, of any of its assets for that purpose; and

(f)

protect the assets of the Company for the benefit of the Company, its creditors and its
members and, at the discretion of the directors, for any person having a direct or indirect
interest in the Company.

7.

Maximum Number of Authorised Shares

7.1

The Company is authorised to issue a maximum of 2,000,000,000 ordinary shares of one class
having a par value of 0.01 (Euro one cent) each.

7.2

The directors or members may from time to time by Resolution of Directors or Resolution of
Members increase the maximum number of shares the Company is authorised to issue, by
amendment to the Memorandum in accordance with the provisions below.

8.

Designation, Powers, Preferences, etc. of Shares

8.1

The designations, powers, preferences, rights, qualifications, limitations and restrictions of each
class and series of each class and series of shares that the Company is authorised to issue shall

be fixed as to voting, dividends, redemption or distributions on liquidation unless the

Memorandum of Association shall have been amended to create separate classes of shares and
all the aforesaid right as to voting, dividends, redemption and distributions shall be identical in
each separate class.
9.

Variation of Class Rights

9.1

If at any time the shares which the Company is authorised to issue are divided into different
classes or series of shares, the rights attached to any class or series (unless otherwise provided
by the terms of issue of the shares of that class or series) may, whether or not the Company is
being wound-up, be varied with the consent in writing of the holders of not less than three-fourths
of the issued shares of that class or series and of the holders of not less than three-fourths of the
issued shares of any other class or series of shares which may be affected by such variation.

10.

Rights not varied by the issue of shares Pari Passu

10.1

The rights conferred upon the holders of the shares of any class issued with preferred or other
rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that
class, be deemed to be varied by the creation of issue of further shares ranking pari passu
therewith.

11.

Registered Shares

11.1

Shares shall be issued as registered shares and shall not be issued as, exchanged or converted
into bearer shares.

12.

Amendments to the Memorandum and Articles

12.1

Subject to the provisions of the Act, the directors or members may from time to time amend the
Memorandum or Articles by Resolution of Directors or Resolution of Members. The directors
shall give notice of such resolution to the registered agent of the Company, for the registered
agent to file with the Registrar a notice of the amendment to the Memorandum or Articles, or a
restated memorandum and articles of association incorporating the amendment(s) made, and any
such amendment to the Memorandum or Articles will take effect from the date of the registration
by the Registrar of the notice of amendment or restated memorandum and articles of association
incorporating the amendment(s) made.

12.2

The directors shall not have the power to amend the Memorandum or Articles:

12.3

(a)

to restrict the rights or powers of the members to amend the Memorandum or Articles;

(b)

to change the percentage of members required to pass a resolution to amend the

Memorandum or Articles; or

(c)

in circumstances where the Memorandum or Articles may only be amended by the

members.

A change of registered office or registered agent shall not constitute an amendment of the
Memorandum or Articles.

12.4

An amendment to the Memorandum or Articles which would have the effect of varying the rights
of the holders of a class of shares may only be made in accordance with the provisions of the
Memorandum and Articles relating to the variation of class rights.

13.

Definitions and Interpretation

13.1

In this memorandum of association and the attached articles of association:

"Act"

means the BVI Business Companies Act, 2004;

"Aim"

means AIM, a market operated by the London

Stock Exchange plc;

"Articles"

means the Company's articles of association as

attached to this Memorandum, and "Article"
shall be construed accordingly;

"Connected"

For the purposes of these Articles a person

("A") shall be treated as being connected with
another person ("B") if A is:
(a) a spouse, civil partner, child (under the age
of eighteen) or stepchild (under the age of
eighteen) of B; or
(b) an associated body corporate which is a
company in which B alone, or with Connected
persons, is directly or indirectly beneficially
interested in 20 per cent. or more of the
nominal value of the equity share capital or is
entitled (alone or with connected persons) to
exercise or control the exercise of more than 20
per cent. of the voting power at general
meetings; or
(c) a trustee (acting in that capacity) of any
trust, the beneficiaries of which include B or
persons falling within paragraphs (a) or (b)
above excluding trustees of an employees
share scheme or pension scheme; or
(d) a partner (acting in that capacity and
pursuant to the terms of a written agreement) of
B or persons in categories (a) to (c) above;

"FSA"

the United
Authority;

"FSA Handbook"

the FSA Handbook of Rules and Guidance (as

amended and replaced from time to time);

"Memorandum"

means this, the Company's memorandum of

Kingdom

Financial

Services

association;
"Registrar"

means the Registrar of Corporate Affairs

appointed under the Act;

"Relevant System"

means any computer-based system and

procedures permitted by the AIM rules of the
London Stock Exchange plc, which enable title
to units of a security to be evidenced and
transferred without a written instrument and
which facilitate supplementary and incidental
matters;

"Resolution of Directors"

means:
(a) a resolution approved at a duly convened
and constituted meeting of directors of the
Company or of a committee of directors of the
Company by the affirmative vote of a simple
majority of the directors present at the meeting
who voted and did not abstain; or
(b) a resolution consented to in writing by all
directors or of all members of the committee, as
the case may be,
except that where a director is given more than
one vote, he shall be counted by the number of
votes he casts for the purpose of establishing a
majority.

"Resolution of Members"

means:
(a) a resolution approved at a duly convened
and constituted meeting of the members of the
Company by the affirmative vote of:
(i) a simple majority of the votes of the shares
entitled to vote thereon which were present at
the meeting and were voted and not abstained,
or;
(ii) a simple majority of the votes of each class
or series of shares which were present at the
meeting and entitled to vote thereon as a class
or series and were voted and not abstained and
of a simple majority of the votes of the
remaining shares entitled to vote thereon which
were present at the meeting and were voted
and not abstained; or
(b) a resolution consented to in writing by:
(i) an absolute majority of the votes of shares

entitled to vote thereon, or

(ii) an absolute majority of the votes of each
class or series of shares entitled to vote thereon
as a class or series and of an absolute majority
of the votes of the remaining shares entitled to
vote thereon;
"United Kingdom"
13.2

means Great Britain and Northern Ireland.

In the Memorandum and Articles:

(a)

words and expressions defined in the Act shall have the same meaning and, unless
otherwise required by the context, the singular shall include the plural and vice versa, the
masculine shall include the feminine and the neuter and references to persons shall
include corporations and all entities capable of having a legal existence;

(b)

reference to a provision of law is a reference to that provision as extended, applied,

amended or re-enacted and includes any subordinate legislation;

(c)

the headings are for convenience only and shall not affect the construction of the
Memorandum or Articles;

(d)

reference to a thing being "written" or "in writing" includes all forms of writing, including
all electronic records which satisfy the requirements of the Electronic Transactions Act,
2001;

(e)

reference to a thing being "signed" or to a person's "signature" shall include reference to

an electronic signature which satisfies the requirements of the Electronic Transactions
Act, 2001, and reference to the Company's "seal" shall include reference to an electronic
seal which satisfies the requirements of the Electronic Transactions Act, 2001.

10

We, ICAZA, GONZALEZ-RUIZ & ALEMAN (BVI) TRUST LIMITED of Vanterpool Plaza, 2nd Floor,
Wickhams Cay I, Road Town, Tortola, British Virgin Islands for the purpose of disapplying Part IV of
Schedule 2 of the BVI Business Companies Act, 2004 hereby sign these Memorandum of Association
this 7th day of June, 2005.
Registered Agent

_________________________
Yexadira Garcia
Authorised Signatory
Icaza, Gonzalez-Ruiz & Aleman (BVI) Trust Limited

11

TERRITORY OF THE BRITISH VIRGIN ISLANDS

THE BVI BUSINESS COMPANIES ACT, 2004

ARTICLES OF ASSOCIATION

OF

DOLPHIN CAPITAL INVESTORS LTD.

1.

Share Certificates

1.1

Every person whose name is entered as a member in the share register, being the holder of
registered shares, shall without payment be entitled to a share certificate in the following
circumstances:
(a)

on the issuance of such shares to such member;

(b)

on the transfer of such shares to such member;

(c)

on a re-designation or conversion of such shares with the effect that the certificate
previously issued no longer properly describes such shares; and

(d)

at the discretion of the directors (who may levy a reasonable charge), on notice to the
Company of a change of name of the member.

1.2

Such certificate shall be signed by a director or under the common seal of the Company with or
without the signature of any director or officer of the Company specifying the share or shares held
and the par value thereof (if the Company is authorised at the relevant time to issue shares with a
par value), provided that in respect of shares held jointly by several persons, the Company shall
not be bound to issue more than one certificate and delivery of a certificate for a share to one of
several joint holders shall be sufficient delivery to all.

1.3

If a certificate is worn out or lost it may, subject to the prior written consent of any mortgagee or
chargee whose interest has been noted on the register of members, be renewed on production of
the worn out certificate, or on satisfactory proof of its loss together with such indemnity as the
directors may reasonably require. Any member receiving a share certificate shall indemnify and
hold the Company and its officers harmless from any loss or liability which it or they may incur by
reason of wrongful or fraudulent use or representation made by any person by virtue of the
possession of such a certificate.

1.4

The Directors shall permit shares to be held in uncertificated form and shall have power to
implement such arrangements as they may, in their absolute discretion, think fit in order for any
class of shares to be transferred by means of a Relevant System of holding and transferring

1
111

11

shares and to be a participating security (subject always to the requirements of the Relevant
System concerned).
1.5

1.6

Where the arrangements described in Article 1.4 are implemented, no provision of these Articles
shall apply or have effect to the extent that it is in any respect inconsistent with:
(a)

the holding of shares of that class in uncertificated form;

(b)

the transfer of title to such shares of that class by means of a Relevant System;

(c)

the requirements of the Relevant System.

Notwithstanding anything contained in these Articles (but subject always to any applicable law
and regulations and the facilities and requirements of any Relevant System):
(a)

unless the Directors otherwise determine, shares held by the same holder or joint holder
in certificated form and uncertificated form shall be treated as separate holdings;

(b)

conversion of shares held in certificated form into shares held in uncertificated form, and
vice versa, may be made in such a manner as the Directors may in their absolute
discretion think fit;

(c)

shares may be changed from uncertificated to certificated form, and from certificated to
uncertificated form, in such manner as the Directors may in their absolute discretion, think
fit;

(d)

Article 6 shall not apply in respect of shares recorded on the register as being held in
uncertificated form to the extent that Article 6 requires or contemplates the effecting of a
transfer by an instrument in writing and the production of a certificate for the share to be
transferred;

(e)

a class of share shall not be treated as two classes by virtue only of that class comprising
both certificated and uncertificated shares or as a result of any provision of these Articles
or any other applicable law or regulation which applies only in respect of certificated and
uncertificated shares;

(f)

The Directors shall, subject to applicable laws and regulations, be entitled to require the
conversion of any uncertificated share into certificated form; and

(g)

Articles 1.1, 1.2 and 1.3 shall not apply so as to require the Company to issue a
certificate to any person holding shares in uncertificated form.

2.

Issue of Shares

2.1

Subject to the provisions of these Articles, the unissued shares of the Company (whether forming
part of the original or any increased authorised shares) shall be at the disposal of the directors
who may offer, allot, grant options over or otherwise dispose of them to such persons at such
times and for such consideration, being not less than the par value (if any) of the shares being
disposed of, and upon such terms and conditions as the directors may determine. Such
consideration may take any form acceptable to the directors, including money, a promissory note,
or other written obligation to contribute money or property, real property, personal property

(including goodwill and know-how), services rendered or a contract for future services. Before
issuing shares for a consideration other than money, the directors shall pass a Resolution of
Directors stating:
(a)

the amount to be credited for the issue of the shares;

(b)

their determination of the reasonable present cash value of the non-money consideration
for the issue; and

(c)

that, in their opinion, the present cash value of the non-money consideration for the issue
is not less than the amount to be credited for the issue of the shares.

2.2

Subject to the provisions of the Act in this regard, shares may be issued on the terms that they
are redeemable, or at the option of the Company be liable to be redeemed on such terms and in
such manner as the directors before or at the time of the issue of such shares may determine.

2.3

The Company may issue bonus shares, partly paid shares and nil paid shares.

2.4

The directors may redeem any share issued by the Company at a premium.

3.

Depository Interests

4.1
3.

The directors shall, subject to any applicable laws and regulations, the facilities and requirements
of any Relevant System concerned and these Articles, have the power to implement and/or
approve any arrangements they may, in their absolute discretion, think fit in relation to (without
limitation) the evidencing of title to and transfer of interests in shares in the capital of the
Company in the form of depositary interests or similar interests, instruments or securities, and to
the extent that such arrangements are so implemented, no provision of these Articles shall apply
or have effect to the extent that it is in any respect inconsistent with the holding or transfer thereof
of the shares in the capital of the Company represented thereby. The Directors may, from time to
time take such actions and do such things as they may, in their absolute discretion, think fit in
respect of the operation of any of the aforesaid arrangements.

4.

Forfeiture of Shares

4.1

The Company may, at any time after the due date for payment, serve on a member who has not
paid in full for shares registered in the name of that member, a written notice of call ("Notice of
Call") specifying a date for payment to be made. The Notice of Call shall name a further date not
earlier than the expiration of 14 days from the date of service of the Notice of Call on or before
which the payment required by the Notice of Call is to be made and shall contain a statement that
in the event of non-payment at or before the time named in the Notice of Call the shares, or any
of them, in respect of which payment is not made will be liable to be forfeited.

4.2

Where a written Notice of Call has been issued under the foregoing Article and the requirements
of the Notice of Call have not been complied with, the directors may, at any time before tender of
payment, forfeit and cancel the shares to which the Notice of Call relates. The Company is under
no obligation to refund any moneys to the member whose shares have been cancelled pursuant
to this Article and that member shall be discharged from any further obligation to the Company.

5.

Transfer of Shares

5.1

Shares in the Company shall be transferred by a written instrument of transfer signed by the
transferor and containing the name and address of the transferee. The instrument of transfer
shall also be signed by the transferee if registration as a holder of the shares imposes a liability to
the Company on the transferee. The instrument of transfer of a registered share shall be sent to
the Company for registration.

5.2

Subject to the Memorandum of Association, these Articles and to section 54(5) of the Act, the
Company shall, on receipt of an instrument of transfer, enter the name of the transferee of the
share in the register of members unless the directors resolve to refuse or delay the registration of
the transfer for reasons that shall be specified in the resolution. Where the directors pass such a
resolution, the Company shall send to the transferor and the transferee a notice of the refusal or
delay. Notwithstanding anything contained in the Memorandum or Articles, the directors shall
not decline to register any transfer of shares, nor may they suspend registration thereof where
such transfer is:
(a)

to any mortgagee or chargee whose interest has been noted on the register of members;

(b)

by any such mortgagee or chargee, pursuant to the power of sale under its security; or

(c)

by any such mortgagee or chargee in accordance with the terms of the relevant security
document.

5.3

The transfer of a registered share is effective when the name of the transferee is entered in the
register of members.

5.4

The board of Directors may, in its absolute discretion, and without assigning any reason therefor,
refuse to register any transfers of shares which are not fully paid PROVIDED THAT such
discretion may not be exercised in such a way as to prevent dealings in the shares of a class
from taking place on an open and proper basis.

5.5

Subject to any limitations in the Memorandum, the Company must on the application of the
transferor or transferee of a registered share in the Company enter in the share register the name
of the transferee of the share save that the registration of transfers may be suspended and the
share register closed at such times and for such periods as the Company may from time to time by
resolution determine provided always that such registration shall not be suspended and the share
register closed for more than 60 days in any period of 12 months.

6.

Mortgages of Shares and Charges Over Shares

6.1

Members may mortgage or create a charge or other form of security over their shares.

6.2

The directors shall, at the written request of a member who has mortgaged or created a charge
over his shares, enter in the register of members of the Company:
(a)

a statement that such shares are mortgaged or charged;

(b)

the name of the mortgagee or chargee (where such information has been stated by the
member); and

(c)

the date on which the statement and name are entered in the register of members.

7.

Transmission of Shares

7.1

Subject to sections 52(2) and 53 of the Act, the executor or administrator of a deceased member,
the guardian of an incompetent member or the trustee of a bankrupt member shall be the only
person recognised by the Company as having any title to his share, save that and only in the
event of death, incompetence or bankruptcy of any member or members of the Company as a
consequence of which the Company no longer has any directors or members, then upon the
production of any documentation which is reasonable evidence of the applicant being entitled to:
(a)

a grant of probate of the deceased's will, or grant of letters of administration of the

deceased's estate, or confirmation of the appointment as executor or administrator (as the
case may be, or analogous position in the relevant jurisdiction), of a deceased member's
estate;

(b)

the appointment of a guardian (or analogous position in the relevant jurisdiction) of an

incompetent member;

(c)

the appointment as trustee (or analogous position in the relevant jurisdiction) of a

bankrupt member; or

(d)

upon production of any other reasonable evidence of the applicant's beneficial ownership
of, or entitlement to the shares,

to the Company's registered agent in the British Virgin Islands together with (if so requested by
the registered agent) a notarised copy of the share certificate(s) of the deceased, incompetent or
bankrupt member, an indemnity in favour of the registered agent and/or appropriate legal advice
in respect of any document issued by a foreign court, then the administrator, executor, guardian
or trustee in bankruptcy (as the case may be) notwithstanding that their name has not been
entered in the share register of the Company, may by written resolution of the applicant,
endorsed with written approval by the registered agent, be appointed a director of the Company
and/or entered in the share register as the legal and/or beneficial owner of the shares.
7.2

Without limiting the foregoing, the production to the Company of any document which is
reasonable evidence of:
(a)

a grant of probate of the will, or grant of letters of administration of the estate, or

confirmation of the appointment as executor (or analogous position in the relevant
jurisdiction), of a deceased member;

(b)

the appointment of a guardian (or analogous position in the relevant jurisdiction) of an

incompetent member;

(c)

the trustee (or analogous position in the relevant jurisdiction) of a bankrupt member; or

(d)

the applicant's legal and/or beneficial ownership of the shares,

shall be accepted by the Company even if the deceased, incompetent member or bankrupt
member is resident and/or domiciled outside the British Virgin Islands if the document is issued
by a foreign court which had competent jurisdiction in the matter. For the purposes of

establishing whether or not a foreign court had competent jurisdiction in such a matter the
directors may obtain appropriate legal advice. The directors may also require an indemnity to be
given by the executor, administrator, guardian, trustee in bankruptcy or the applicant.
7.3

Any person becoming entitled by operation of law or otherwise to a share or shares in

consequence of the death, incompetence or bankruptcy of any member may be registered as a
member upon such evidence being produced as may reasonably be required by the directors. An
application by any such person to be registered as a member shall for all purposes be deemed to
be a transfer of shares of the deceased, incompetent or bankrupt member and the directors shall
treat it as such.

7.4

Any person who has become entitled to a share or shares in consequence of the death,
incompetence or bankruptcy of any member may, instead of being registered himself, request in
writing that some person to be named by him be registered as the transferee of such share or
shares and such request shall likewise be treated as if it were a transfer.

7.5

What amounts to incompetence on the part of a person is a matter to be determined by the court
having regard to all the relevant evidence and the circumstances of the case.

8.

Reduction or Increase in Shares Authorized to Issue and Acquisition of own Shares

8.1

Company may by a resolution of directors amend the Memorandum to increase or reduce the
shares which it is authorised to issue and in connection therewith the Company may in respect of
any unissued shares increase or reduce the number of such shares, increase or reduce the par
value of any such shares or effect any combination of the foregoing.

8.2

The Company may by a resolution of directors amend the Memorandum to:

(a)

divide the shares, including issued shares, of a class or series into a larger number of
shares of the same class or series; or

(b)

combine the shares, including issued shares, of a class or series into a smaller number of
shares of the same class or series,

provided, however, that where shares are divided or combined under (a) or (b) of this Article, the
aggregate par value of the new shares must be equal to the aggregate par value of the original
shares.
8.3

The directors may, on behalf of the Company, subject to the written consent of all the members
whose shares are to be purchased, redeemed or otherwise acquired, purchase, redeem or
otherwise acquire any of the Company's own shares for such consideration as the directors
consider fit, and either cancel or hold such shares as treasury shares. Shares may be purchased
or otherwise acquired in exchange for newly issued shares in the Company.

8.4

The directors shall not, unless permitted pursuant to the Act, purchase, redeem or otherwise
acquire any of the Company's own shares unless immediately after such purchase, redemption or
other acquisition:
(a)

the value of the Company's assets exceeds it liabilities other than deferred taxes as
shown in its books of account; and

(b)

the Company is able to pay its debts as they fall due.

8.5

Sections 60 and 61 of the Act shall not apply to the Company.

9.

Treasury Shares

9.1

Shares may only be held as treasury shares by the Company to the extent that the number of
treasury shares does not exceed 50% of the shares of that class previously issued by the
Company, excluding shares that have been cancelled.

9.2

The directors may dispose of or cancel and make available for re-issue any shares held as
treasury shares on such terms and conditions as they may from time to time determine.

10.

Notice of Meetings of Members

10.1

The directors of the Company may convene meetings of the members of the Company at such
times and in such manner and places within or outside the British Virgin Islands as the directors
consider necessary or desirable.

10.2

Upon the written request of members holding 10 per cent or more of the outstanding voting
shares in the Company the Directors shall convene a meeting of members.

10.3

The director shall give not less than 7 days' notice of a meeting of members to those persons
whose names appear as members in the share register of the Company and are entitled to vote
at the meeting at the close of business on a day determined by the directors.

10.4

The directors may fix the date notice is given of a meeting of members as the record date for
determining those shares that are entitled to vote at the meeting.

10.5

A meeting of members may be called on short notice:

(a)

if members holding not less than 90 per cent of the total number of shares entitled to vote
on all matters to be considered at the meeting, or 90 per cent of the votes of each class or
series of shares where members are entitled to vote thereon as a class or series together
with not less than a 90 per cent majority of the remaining votes, have agreed to short
notice of the meeting, or

(b)

if all members holding shares entitled to vote on all or any matters to be considered at the
meeting have waived notice of the meeting; and for this purpose presence at the meeting
shall be deemed to constitute waiver.

10.6

The inadvertent failure of the directors to give notice of a meeting to a member, or the fact that a
member has not received notice, does not invalidate the meeting.

10.7

A member may be represented at a meeting of members by a proxy who may speak and vote on
behalf of the member.

10.8

The instrument appointing a proxy shall be produced at the place appointed for the meeting
before the time for holding the meeting at which the person named in such instrument proposes
to vote.

10.9

An instrument appointing a proxy shall be in substantially the following form or such other form as
the Chairman of the meeting shall accept as properly evidencing the wishes of the member
appointing the proxy. Only members who are individuals may appoint proxies.
(Name of the Company)
being a member of the above Company with shares
of
or, failing him
of
to be my/our proxy to vote for me/us
at the meeting of members to be held on the
day of
and at any
adjournment thereof.
I/We
HEREBY APPOINT

(Any restrictions on voting to be inserted here)

Signed this
day of
.
Member
10.10 The following shall apply in respect of joint ownership of shares:
(a)

if two or more persons hold shares jointly each of them may be present in person or by
proxy at a meeting of members and may speak as a member;

(b)

if only one of the joint owners is present in person or by proxy he may vote on behalf of all
joint owners, and

(c)

if two or more of the joint owners are present in person or by proxy they must vote as one.

10.11 A member shall be deemed to be present at a meeting of members if he participates by

telephone or other electronic means and all members participating in the meeting are able to hear
each other.
10.12 A meeting of members is duly constituted if, at the commencement of the meeting, there are
present in person or by proxy not less than 50 per cent. of the votes of the shares or class or
series of shares entitled to vote on resolutions of members to be considered at the meeting. If a
quorum is present, notwithstanding the fact that such quorum may be represented by only one
person then such person may resolve any matter and a certificate signed by such person
(accompanied where such person be a proxy by a copy of the proxy form) shall constitute a valid
resolution of members.
10.13 If within two hours from the time appointed for the meeting a quorum is not present, the meeting,
if convened upon the requisition of members, shall be dissolved; in any other case it shall stand
adjourned to the next business day at the same time and place or to such other time and place as
the directors may determine, and if at the adjourned meeting there are present within one hour
from the time appointed for the meeting in person or by proxy not less than one third of the votes
of the shares of each class or series of shares entitled to vote on the resolutions to be considered
by the meeting, those present shall constitute a quorum but otherwise the meeting shall be
dissolved.
10.14 At every meeting of members, the Chairman of the Board of Directors shall preside as chairman
of the meeting. If there is no Chairman of the Board of Directors or if the Chairman of the Board
of Directors is not present at the meeting, the members present shall choose one of their number

to be the chairman. If the members are unable to choose a chairman for any reason, then the
person representing the greatest number of voting shares present in person or by prescribed form
of proxy at the meeting shall preside as chairman, failing which the oldest individual member or
representative of a member present shall take the chair.
10.15 The chairman may, with the consent of the meeting, adjourn any meeting from time to time, and
from place to place, but no business shall be transacted at any adjourned meeting other than the
business left unfinished at the meeting from which the adjournment took place.
10.16 At any meeting of the members the chairman shall be responsible for deciding in such manner as
he shall consider appropriate whether any resolution has been carried or not and the result of his
decision shall be announced to the meeting and recorded in the minutes thereof. If the chairman
shall have any doubt as to the outcome of any resolution put to the vote, he shall cause a poll to
be taken of all votes cast upon such resolution, but if the chairman shall fail to take a poll then
any member present in person or by proxy who disputes the announcement by the chairman of
the result of any vote may immediately following such announcement demand that a poll be taken
and the chairman shall thereupon cause a poll to be taken. If a poll is taken at any meeting, the
result thereof shall be duly recorded in the minutes of that meeting by the chairman.
10.17 Any person other than an individual which is a member of the Company may by resolution of its
directors or other governing body authorise such person as it thinks fit to act as its representative
at any meeting of the Company or of any class of members of the Company, and the person so
authorised shall be entitled to exercise the same powers on behalf of the person which he
represents as that person could exercise if it were an individual member of the Company. The
right of any individual to speak for or represent such member shall be determined by the law of
the jurisdiction where, and by the documents by which, the person is constituted or derives its
existence. In case of doubt, the Directors may in good faith seek legal advice from any qualified
person and unless and until a court of competent jurisdiction shall otherwise rule, the Directors
may rely and act upon such advice without incurring any liability to any member.
10.18 The chairman of any meeting at which a vote is cast by proxy or on behalf of any person other
than an individual may call for a notarially certified copy of such proxy or authority which shall be
produced within 7 days of being so requested or the votes cast by such proxy or on behalf of
such person shall be disregarded.
10.19 Directors of the Company may attend and speak at any meeting of members of the Company and
at any separate meeting of the holders of any class or series of shares in the Company.
10.20 An action that may be taken by the members at a meeting may also be taken by a Written
Resolution.

11.

Directors

11.1

The first directors of the Company shall be appointed by the subscribers to the Memorandum
within 30 days of the date of incorporation of the Company; and thereafter, the Directors shall be
elected by the members for such term as the members determine. The first directors may elect
any number of additional directors for such term as they may determine until such time as the
members shall elect or re-elect any one or more directors.

11.2

The minimum number of directors shall be one and the maximum number shall be seven. At no
time shall a majority of directors be resident in the United Kingdom.

11.3

Each director shall hold office for the term, if any, fixed by resolution of members or until his
earlier death, resignation or removal.

11.4

A director may be removed from office, with or without cause, by a resolution of members.

11.5

A director may resign his office by giving written notice of his resignation to the Company and the
resignation shall have effect from the date the notice is received by the Company or from such
later date as may be specified in the notice.

11.6

A vacancy in the board of directors may be filled by a resolution of members or by a resolution of

a majority of the remaining directors.

11.7

With the prior or subsequent approval by a Resolution of Members, the directors may, by a
Resolution of Directors, fix the emoluments of directors with respect to services to be rendered in
any capacity to the Company.

11.8

A director shall not require a share qualification, and must be an individual.

12.

Disqualification and Removal of Directors

12.1

The office of a director shall ipso facto be vacated:-

12.2

(a)

if he (not being a person holding for a fixed term an executive office subject to termination
if he ceases for any cause to be a director) resigns his office by written notice signed by
him sent to or deposited at the registered office;

(b)

if he shall have absented himself (such absence not being absence with leave or by
arrangement with the Board of Directors on the affairs of the Company) from meetings of
the Board for a consecutive period of six months and the Board resolves that his office
shall be vacated;

(c)

if he becomes of unsound mind or incapable;

(d)

if he becomes insolvent, suspends payment or compounds with his creditors;

(e)

if the Company in general meeting by ordinary resolution shall declare that he shall cease
to be a director; or

(f)

if he becomes resident in the United Kingdom and, as a result thereof, a majority of the
directors are resident in the United Kingdom.

If the Company in a general meeting removes any director before the expiration of his period of
office it may by an ordinary resolution appoint another person to be a director in his stead who
shall retain his office so long only as the director in whose stead he is appointed would have held
the same if he had not been removed. Such removal shall be without prejudice to any claims
such director may have for damages for breach of any contract of service between him and the
Company.

10

13.

Duties of Directors and Conflicts of Interests

13.1

A director of the Company, in exercising his powers or performing his duties, shall act honestly
and in good faith and in what the director believes to be in the best interests of the Company.

13.2

Notwithstanding the foregoing Article, if the Company is a wholly-owned subsidiary, a director of

the Company may, when exercising powers or performing duties as a director, act in a manner
which he believes is in the best interests of that Companys holding company (as defined in the
Act) even though it may not be in the best interests of the Company.

13.3

A director shall exercise his powers as a director for a proper purpose and shall not act, or agree
to the Company acting, in a manner that contravenes the Act or the Memorandum or Articles.

13.4

A director, when exercising powers or performing duties as a director, shall exercise the care,
diligence, and skill that a reasonable director would exercise in the same circumstances taking
into account, but without limitation:

13.5

(a)

the nature of the Company;

(b)

the nature of the decision; and

(c)

the position of the director and the nature of the responsibilities undertaken by him.

A director of the Company, when exercising his powers or performing his duties as a director, is
entitled to rely upon the register of members and upon books, records, financial statements and
other information prepared or supplied, and on professional or expert advice given, by:
(a)

an employee of the Company whom the director believes on reasonable grounds to be

reliable and competent in relation to the matters concerned;

(b)

a professional adviser or expert in relation to matters which the director believes on

reasonable grounds to be within the persons professional or expert competence; and

(c)

any other director, or committee of directors upon which the director did not serve, in
relation to matters within the directors or committees designated authority,
provided that the director:

(d)

acts in good faith;

(e)

makes proper inquiry where the need for the inquiry is indicated by the circumstances;
and

(f)

has no knowledge that his reliance on the register of members or the books, records,
financial statements and other information or expert advice is not warranted.

13.6

A director may hold any other office or position of profit under the Company (except that of
auditor) in conjunction with his office of director, and may act in a professional capacity to the
Company on such terms as to remuneration and otherwise as the directors shall approve.

13.7

A director may be or become a director or officer of, or otherwise be interested in any company
promoted by the Company, or in which the Company may be interested, as a member or

11

otherwise and no such director shall be accountable for any remuneration or other benefits
received by him as director or officer or from his interest in such other company. The directors
may also exercise the voting powers conferred by the shares in any other company held or
owned by the Company in such manner in all respects as they think fit, including the exercise
thereof in favour of any resolutions appointing them, or of their number, directors or officers of
such other company, or voting or providing for the payment of remuneration to the directors or
officers of such other company. A director may vote in favour of the exercise of such voting rights
in the manner aforesaid notwithstanding that he may be, or be about to become, a director or
officer of such other company, and as such in any other manner is, or may be, interested in the
exercise of such voting rights in the manner aforesaid.
13.8

No director shall be disqualified by his office from contracting with the Company either as a buyer,
seller or otherwise, nor shall any such contract or arrangement entered into by or on behalf of the
Company in which any director shall be in any way interested be voided, nor shall any director so
contracting or being so interested be liable to account to the Company for any profit realised by
any such contract or arrangement, by reason of such director holding that office or by reason of
the fiduciary relationship thereby established, provided such director shall, immediately after
becoming aware of the fact that he is interested in a transaction entered into or to be entered into
by the Company, disclose such interest to the board of directors. For the purposes of this Article:
(a)

13.9

A director of the Company is not required to make such a disclosure if:

(i)

the transaction or proposed transaction is between the director and the Company;
and

(ii)

the transaction or proposed transaction is or is to be entered into in the ordinary

course of the Company's business and on usual terms and conditions.

(b)

A disclosure to the board to the effect that a director is a member, director, officer or
trustee of another named company or other person and is to be regarded as interested in
any transaction which may, after the date of the entry or disclosure, be entered into with
that company or person, is a sufficient disclosure of interest in relation to that transaction.
Such a disclosure is not made to the board unless it is made or brought to the attention of
every director on the board.

(c)

Subject to section 125(1) of the Act, the failure by a director to comply with this Article
does not affect the validity of a transaction entered into by the director or the Company.

A director of the Company who is interested in a transaction entered into or to be entered into by
the Company may:
(a)

vote on a matter relating to the transaction;

(b)

attend a meeting of directors at which a matter relating to the transaction arises and be
included among the directors present at the meeting for the purposes of a quorum; and

(c)

sign a document on behalf of the Company, or do any other thing in his capacity as a
director, that relates to the transaction.

12

14.

Powers of Directors

14.1

The business and affairs of the Company shall be managed by the directors who may pay all
expenses incurred preliminary to and in connection with the formation and registration of the
Company and may exercise all such powers of the Company as are not by the Act or by the
Memorandum or these Articles required to be exercised by the members of the Company, subject
to any delegation of such powers as may be authorised by these Articles and to such
requirements as may be prescribed by a resolution of members; but no requirement made by a
resolution of members shall prevail if it be inconsistent with these Articles nor shall such
requirement invalidate any prior act of the directors which would have been valid if such
requirement had not been made.

14.2

The directors may, by a resolution of directors, appoint any person, including a person who is a
director, to be an officer or agent of the Company.

14.3

Every officer or agent of the Company has such powers and authority of the directors, including
the power and authority to affix the Seal, as are set forth in these Articles or in the Resolution of
Directors appointing the officer or agent, except that no officer or agent has any power or
authority with respect to fixing the emolument of directors.

14.4

The continuing directors may act notwithstanding any vacancy in their body, save that if their
number is reduced to their knowledge below the number fixed by or pursuant to these Articles as
the necessary quorum for a meeting of directors, the continuing directors or director may act only
for the purpose of appointing directors to fill any vacancy that has arisen or summoning a meeting
of members.

14.5

All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all
receipts for moneys paid to the Company, shall be signed, drawn, accepted, endorsed or
otherwise executed, as the case may be, in such manner as shall from time to time be
determined by resolution of directors.

15.

Delegation by the Board to Directors, Committees, Officers, Attorneys and Agents

15.1

The board of directors (the "Board of Directors") may entrust to and confer upon any director or
officer any of the powers exercisable by it upon such terms and conditions and with such
restrictions as it thinks fit, and either collaterally with, or to the exclusion of, its own powers, and
may from time to time revoke, withdraw, alter or vary all or any of such powers. Subject to the
provisions of section 110 of the Act, the directors may delegate any of their powers to committees
consisting of such member or members of their body as they think fit. Any committees so formed
shall in the exercise of powers so delegated conform to any regulations that may be imposed on it
by the directors or the provisions of the Act.

15.2

The directors have no power to delegate the following powers to a committee of directors:
(a)

to amend the Memorandum or Articles;

(b)

to designate committees of directors;

(c)

to delegate powers to a committee of directors; (This and the preceding sub-Article do not
prevent a committee of directors, where authorised by the directors, from appointing a

13

sub-committee and delegating powers exercisable by the committee to the subcommittee);

(d)

to appoint or remove directors;

(e)

to appoint or remove an agent;

(f)

to approve a plan or merger, consolidation or arrangement;

(g)

to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or
approve a liquidation plan; or

(h)

to make a determination under section 57(1) of the Act that the Company will,
immediately after a proposed distribution, satisfy the solvency test.

15.3

Where the directors of the Company delegate their powers to a committee of directors, they
remain responsible for the exercise of that power by the committee, unless they believed on
reasonable grounds that at all times before the exercise of the power that the committee would
exercise the power in conformity with the duties imposed on directors of the Company by the Act.

15.4

The directors of the Company may, by Resolution of Directors, appoint officers of the Company at
such times as shall be considered necessary or expedient. The officers shall perform such duties
as shall be prescribed at the time of their appointment subject to any modifications in such duties
as may be prescribed by the directors thereafter.

15.5

Any person may hold more than one office and no officer need be a director or member of the
Company. The officers shall remain in office until removed from office by the directors, whether
or not a successor is appointed.

15.6

Any officer who is a body corporate may appoint any person as its duly authorised representative
for the purpose of representing it and of transacting any of the business of the officers.

15.7

The directors may from time to time by power of attorney appoint any company, firm or person or
body of persons to be the attorney or attorneys of the Company for such purposes and with such
powers, authorities and discretions (not exceeding those vested in or exercisable by the directors
under these Articles) and for such period and subject to such conditions as the directors think fit.

15.8

The directors may appoint any person, including a person who is a director, to be an agent of the
company. An agent of the Company has such powers and authority of the directors, including the
power and authority to affix the common seal of the Company, as are set forth in the Resolution
of Directors appointing the agent, except that no agent has any power or authority with respect to
the following:
(a)

to amend the Memorandum or Articles;

(b)

to change the registered office or registered agent;

(c)

to designate committees of directors;

(d)

to delegate powers to a committee of directors;

14

15.9

(e)

to appoint or remove directors;

(f)

to appoint or remove an agent;

(g)

to fix emoluments of directors;

(h)

to approve a plan of merger, consolidation or arrangement;

(i)

to make a declaration of solvency for the purposes of section 198(1)(a) of the Act or to
approve a liquidation plan;

(j)

to make a determination under section 57(1) of the Act that the Company will,
immediately after a proposed distribution, satisfy the solvency test as stipulated in section
56 of the Act; or

(k)

to authorise the Company to continue as a company incorporated under the laws of a

jurisdiction outside the British Virgin Islands.

Where the directors appoint any person to be an agent of the Company, they may authorise the
agent to appoint one or more substitutes or delegates to exercise some or all of the powers
conferred on the agent by the Company.

15.10 The directors may at any time remove an agent and may revoke or vary a power conferred on
him.

16.

Proceedings of Directors

16.1

The directors of the Company or any committee thereof may meet at such times and in such
manner and places within or outside the British Virgin Islands as the directors may determine to
be necessary or desirable. Questions arising at any meeting shall be decided by a majority of
votes. In case of an equality of votes the Chairman at the meeting shall have a second or casting
vote, but only if the effect of the exercise of such a vote is not to render a decision or vote in
question one which is reached or passed by a majority of directors who are resident in the United
Kingdom. All meetings of directors shall take place outside the United Kingdom and any decision
reached or resolution passed by the directors at any meeting not held outside the United
Kingdom or at which a majority of directors resident in the United Kingdom is present shall be
invalid and of no effect.

16.2

A director shall be deemed to be present at a meeting of directors if he participates by telephone

or other electronic means and all directors participating in the meeting are able to hear each other
PROVIDED THAT no directors physically present in the United Kingdom at the time of any such
meeting may participate in a meeting by means of video link, telephone conference call or other
electronic or telephonic means of communication unless a majority of the Directors participating
are physically present outside the United Kingdom.

16.3

A director shall be given not less than three days' notice of meetings of directors, but a meeting of
directors held without three days notice having been given to all directors shall be valid if all the
directors entitled to vote at the meeting who do not attend, waive notice of the meeting and for
this purpose, the presence of a director at a meeting shall constitute waiver on his part. The
inadvertent failure to give notice of a meeting to a director, or the fact that a director has not
received the notice, does not invalidate the meeting.

15

16.4

A director may by a written instrument appoint an alternate who need not be a director and an
alternate is entitled to attend meetings in the absence of the director who appointed him and to
vote or consent in place of the director PROVIDED THAT a director who is resident outside the
United Kingdom shall not be entitled to appoint an alternate who is resident in the United
Kingdom.

16.5

A meeting of directors is duly constituted for all purposes if at the commencement of the meeting
there are present in person or by alternate not less than one half of the total number of directors,
unless there are only two directors in which case the quorum shall be two.

16.6

If the Company shall have only one director the provisions herein contained for meetings of the
directors shall not apply but such sole director shall have full power to represent and act for the
Company in all matters as are not by the Act or the Memorandum or these Articles required to be
exercised by the members of the Company and in lieu of minutes of a meeting shall record in
writing and sign a note or memorandum of all matters requiring a resolution of directors. Such a
note or memorandum shall constitute sufficient evidence of such resolution for all purposes.

16.7

The Board of Directors may elect one of their number other than a United Kingdom resident
director as Chairman of their meetings and determine the period for which he is to hold office. At
every meeting of the directors the Chairman of the Board of Directors shall preside as chairman
of the meeting. If there is no Chairman of the Board of Directors or if the Chairman of the Board
of Directors is not present at the meeting the Vice Chairman of the Board of Directors shall
preside. If there is no Vice Chairman of the Board of Directors or if the Vice Chairman of the
Board of Directors is not present at the meeting the directors present shall choose someone of
their number to be chairman of the meeting.

16.8

An action that may be taken by the directors or a committee of directors at a meeting may also be
taken by a Resolution of Directors or a committee of directors consented to in writing or by telex,
telegram, cable, facsimile or other written electronic communication by all Directors or all
members of the committee as the case may be, without the need for any notice. No such
resolution shall be valid if a majority of the directors sign the resolution in the United Kingdom.

16.9

The directors shall cause the following corporate records to be kept:

(a)

minutes of all meetings of directors, members, committees of directors, committees of

officers and committees of members;

(b)

copies of all resolutions consented to by directors, members, committees of directors,

committees of officers and committees of members; and

(c)

such other accounts and records as the directors by resolution of directors consider
necessary or desirable in order to reflect the financial position of the Company.

16.10 The books, records and minutes shall be kept at the registered office of the Company, its
principal place of business or at such other place as the directors determine.
16.11 The directors may, by Resolution of Directors, designate one or more committees, each
consisting of one or more directors PROVIDED THAT all or a majority of the members of any
such committee shall be persons who are resident outside the United Kingdom. Such
committees shall meet only outside the United Kingdom.

16

16.12 Each committee of directors has such powers and authorities of the directors, including the power
and authority to affix the Seal, as are set forth in the resolution of directors establishing the
committee, except that no committee has any power or authority to amend the Memorandum or
these Articles, to appoint directors or fix their emoluments, or to appoint officers or agents of the
Company.
16.13 The meetings and proceedings of each committee of directors consisting of two or more directors
shall be governed mutatis mutandis by the provisions of these Articles regulating the proceedings
of directors so far as the same are not superseded by any provisions in the resolution
establishing the committee.

17.

Indemnification and Insurance

17.1

Subject to the provisions of the Act and the subsequent provisions of this Article, the Company
may indemnify against all expenses, including legal fees, and against all judgments, fines and
amounts paid in settlement and reasonably incurred in connection with legal, administrative or
investigative proceedings any person who:

17.2

(a)

is or was a party or is threatened to be made a party to any threatened, pending or

completed proceedings, whether civil, criminal, administrative or investigative, by reason
of the fact that the person is or was a director of the Company; or

(b)

is or was, at the request of the Company, serving as a director of, or in any other capacity
is or was acting for, another company or a partnership, joint venture, trust or other
enterprise.

This Article applies only to a person who has acted honestly and in good faith and in what he
believed to be the best interests of the Company and, in the case of criminal proceedings, the
person had no reasonable cause to believe that his conduct was unlawful. The Company shall
not indemnify a person who has not so acted, and any indemnity given to such a person is void
and of no effect. A director acts in the best interests of the Company if he acts in the best
interests of:
(a)

the Companys holding company; or

(b)

a shareholder or shareholders of the Company;

in either case, in the circumstances specified in the sub-Articles below, as the case may be:
17.3

The termination of any proceedings by any judgement, order, settlement, conviction or the
entering of a nolle prosequi does not, by itself, create a presumption that the person did not act
honestly and in good faith and with a view to the best interests of the Company or that the person
had reasonable cause to believe that his conduct was unlawful.

17.4

Expenses, including legal fees, incurred by a director in defending any legal, administrative or
investigative proceedings may be paid by the Company in advance of the final disposition of such
proceedings upon receipt of an undertaking by or on behalf of the director to repay the amount if
it shall ultimately be determined that the director is not entitled to be indemnified by the Company
in accordance with this Article.

17

17.5

Expenses, including legal fees, incurred by a former director in defending any legal,
administrative or investigative proceedings may be paid by the Company in advance of the final
disposition of such proceedings upon receipt of an undertaking by or on behalf of the former
director to repay the amount if it shall ultimately be determined that the former director is not
entitled to be indemnified by the Company in accordance with this Article and upon such other
terms and conditions, if any, as the Company deems appropriate.

17.6

The indemnification and advancement of expenses provided by, or granted pursuant to, this
Article is not exclusive of any other rights to which the person seeking indemnification or
advancement of expenses may be entitled under any agreement, resolution of members,
resolution of disinterested directors or otherwise, both as to acting in the persons official capacity
and as to acting in another capacity while serving as a director of the Company.

17.7

The Company may purchase and maintain insurance in relation to any person who is or was a
director of the Company, or who at the request of the Company is or was serving as a director of,
or in any other capacity is or was acting for, another body corporate or a partnership, joint
venture, trust or other enterprise, against any liability asserted against the person and incurred by
the person in that capacity, whether or not the Company has or would have had the power to
indemnify the person against the liability under the foregoing Article.

18.

Notification of Interest in Shares

18.1

For so long as the Company has any of its Shares admitted to trading on AIM, or any successor
market or any other market operated by the London Stock Exchange plc., every member shall
comply with the notification and disclosure requirements set out in Chapter 5 of the Disclosure
and Transparency Rules Sourcebook (as amended and varied from time to time) of the FSA
Handbook as if the Company were classified as an "Issuer" whose "Home State" is the "United
Kingdom" (as such terms are defined in the FSA Handbook).

18.2

If it shall come to the notice of the directors that any member has not, within the requisite period
made or, as the case may be, procured the making of any notification required by this Article, the
Company may (at the absolute discretion of the directors) at any time thereafter by notice (a
"Restriction Notice") to such member direct that, in respect of the shares in relation to which the
default has occurred (the "Default Shares") which expression shall include any further shares
which are issued in respect of any Default Shares), the member shall not be entitled to be present
or to vote on any question (either in person or in proxy), at any general meeting of the Company
or separate general meeting of the holders of any class of shares of the Company, or to be
recognised in a quorum or to sign a written resolution.

18.3

Where the Default Shares represent at least 0.25 per cent. in nominal value of the issued shares
of their class, then the restriction notice may additionally direct that in respect of the Default
Shares:
(a)

any dividend or any part of a dividend or other amounts payable in respect of the Default
Shares be withheld by the Company, which has no obligation to pay interest on the same,
and shall be payable (when the restriction notice ceases to have effect) to the person who
would but for the Restriction Notice have been entitled to them; and/or

(b)

where an offer of the right to elect to receive shares of the Company instead of cash in
respect of any dividend or part thereof is or has been made by the Company any election

18

made thereunder by such member in respect of such Default Shares shall not be
effective; and/or
(c)

no transfer of any of the shares held by any such member shall be recognised or
registered by the directors unless: (1) the transfer is an excepted transfer; or (2) the
member is not himself in default as regards supplying the requisite information required
under this Article and, when presented for registration the transfer is accompanied by a
certificate by the member in a form satisfactory to the directors to the effect that after due
and careful enquiry the member is satisfied that none of the shares, the subject of the
transfer are Default Shares.

18.4

The Company shall send a copy of the Restriction Notice to each other person appearing to be
interested in the shares the subject of such notice, but the failure or omission by the Company to
do so shall not invalidate the notice.

18.5

Any Restriction Notice shall have effect in accordance with its terms from the date it is given until
not more than seven days after the Directors are satisfied that the default in respect of which the
Restriction Notice was issued no longer continues but shall cease to have effect in relation to any
shares which are transferred by such member. The Company may (at the absolute discretion of
the directors) at any time give notice to the member cancelling or suspending for a stated period
the operation of a Restriction Notice in whole or part.

18.6

A person, other than the member holding a share, shall be treated as appearing to be interested
in that share if the member has informed the Company that the person is, or may be interested,
or the Company after taking account of information obtained from a member knows or has
reasonable cause to believe that the person is, or maybe, so interested.

19.

Request for Information

19.1

The directors shall have power by notice in writing to require any member to disclose to the
Company the identity of any person other than the member (an "Interested Party") who has any
interest in the Relevant Share Capital held by the member and the nature of such interest.

19.2

Any such notice shall require any information in response to such notice to be given in writing
within such reasonable time as the directors shall determine.

19.3

The Company shall maintain a register of interested parties as if the register of Interested Parties
was the register of members and whenever in pursuance of a requirement imposed on a
shareholder as aforesaid the Company is informed of an Interested Party the identity of the
Interested Party and the nature of the interest shall be promptly inscribed therein together with
the date of the request.

19.4

The directors may be required to exercise their powers under Article 20.1 on the requisition of
members of the Company holding at the date of the deposit of the requisition not less than one
tenth of such of the paid-up capital of the Company as carries at that date the right of voting at
general meetings of the Company. The requisition must:(a)

state that the requisitionists are requiring the Company to exercise its powers under this
Article;

(b)

specify the manner in which they require those powers to be exercised; and

19

(c)

give reasonable grounds for requiring the Company to exercise those powers in the
manner specified,

and must be signed by the requisitionists and deposited at the registered office.
The requisition may consist of several documents in like form each signed by one or more
requisitionists.
On the deposit of a requisition complying with this section it is the directors duty to exercise their
powers under Article 20.1 in the manner specified in the requisition.
19.5

If any member has been duly served with a notice given by the directors in accordance with
Article 20.1 and is in default for the prescribed period in supplying to the Company the information
thereby required, then the Directors may in their absolute discretion at any time thereafter serve a
notice (a Direction Notice) upon such member as follows:(a)

(b)

a Direction Notice may direct that, in respect of:(i)

the shares comprising the shareholder account in the Register which comprises
or includes the shares in relation to which the default occurred (all or the relevant
number as appropriate of such shares being the Default Shares);

(ii)

and any other shares held by the member;

(iii)

the member shall have no right to vote at a general meeting or meeting of the
holders of any class of shares of the Company either personally or by proxy or to
exercise any other right conferred by membership in relation to meetings of the
Company or of the holders of any class of shares of the Company; and

where the Default Shares represent at least 0.25 per cent. of the class of shares
concerned, then the direction notice may additionally direct that:
(i)

in respect of the Default Shares, any dividend or part thereof which would
otherwise be payable on such shares shall be retained by the Company without
any liability to pay interest thereon when such money is finally paid to the
member;

(ii)

no transfer other than an excepted transfer (as defined below) of any of the
shares held by such member shall be registered unless:(A)

the member is not himself in default as regards supplying the information

requested; and

(B)

the transfer is of part only of the members holding and when presented
for registration is accompanied by a certificate by the member in a form
satisfactory to the Directors to the effect that after due and careful enquiry
the member is satisfied that no person in default as regards supplying
such information has an interest in any of the shares the subject of the
transfer.

20

The Company shall send to each other person appearing to have an Interest in
the shares the subject of any Direction Notice a copy of the notice, but failure or
omission by the Company to do so shall not invalidate such notice.
19.6

If shares are issued to a member as a result of that member holding other shares in the Company
and if the shares in respect of which the new shares are issued are Default Shares in respect of
which the member is for the time being subject to particular restrictions, the new shares shall on
issue become subject to the same restrictions whilst held by that member as such Default
Shares. For this purpose, shares which the Company procures to be offered to members pro rata
(or pro rata ignoring fractional entitlements and shares not offered to certain members by reason
of legal or practical problems associated with offering shares outside the United Kingdom) shall
be treated as shares issued as a result of a member holding other shares in the Company.

19.7

Any Direction Notice shall have effect in accordance with its terms for as long as the default, in
respect of which the Direction Notice was issued, continues but shall cease to have effect in
relation to any shares which are transferred by such member by means of an excepted
transfer(as defined below). As soon as practical after the Direction Notice has ceased to have
effect (and in any event within seven days thereafter) the Directors shall procure that the
restrictions imposed by Articles 20.5 and 20.6 above shall be removed and that dividends and
other monies withheld pursuant to Article 20.5(b)(i) above are paid to the relevant member.

19.8

For the purpose of this Article:-

19.9

(a)

a person shall be treated as appearing to be interested in any shares if the member

holding such shares has given to the Company a notification which either (a) names such
person as having an Interest in Relevant Share Capital or (b) fails to establish the
identities of those having an Interest in Relevant Share Capital in the shares and (after
taking into account the said notification and any other relevant notification) the Company
knows or has reasonable cause to believe that the person in question is or may have an
interest in the Relevant Share Capital;

(b)

the prescribed period in respect of any particular member is 28 days from the date of
service of the said notice in accordance with Article 20.1 except where the Default Shares
represent at least 0.25 per cent. of the class of shares concerned in which case such
period shall be fourteen days;

Any shareholder who has given notice of an interested party in accordance with Article 20.2 who
subsequently ceases to have any party interested in his shares or has any other person
interested in his shares shall notify the Company in writing of the cessation or change in such
interest and the Directors shall promptly amend the register of interested parties accordingly.

19.10 For the purposes of this Article 20, a transfer of shares is an "excepted transfer" if, but only if:
(a)

It is a transfer by way of, or in pursuance of, acceptance of a takeover offer for the
Company meaning an offer to acquire all the shares, or all the shares of any class or
classes, in the Company (other than shares which at the date of the offer are already held
by the offeror), being an offer on terms which are the same in relation to all the shares to
which the offer relates or, where those shares include shares of different classes, in
relation to all the shares of each class; or

21

(b)

a transfer which is shown to the satisfaction of the Board to be made in consequence of a

sale of the whole of the beneficial interest in the shares to a person that is not Connected
with a member and with any other person appearing with or to be interested in the shares;
or

(c)

a transfer in consequence of a sale made through the London Stock Exchange plc or any
stock exchange outside of the United Kingdom on which the Company's shares of the
same class as the Default Shares are normally traded.

20.

Company Seal and Entry into Contracts and Deeds

20.1

The directors shall provide for the safe custody of the common seal of the Company. The
common seal when affixed to any instrument (save for a share certificate in accordance with
these Articles) shall be witnessed by a director or officer of the Company or any other person so
authorised from time to time by the directors.

20.2

A contract may be entered into by the Company as follows:

20.3

(a)

a contract that, if entered into by an individual, would be required by law to be in writing

and under seal, may be entered into by or on behalf of the Company in writing under the
common seal of the Company, or executed by or on behalf of the Company by a director
or an authorised agent of the Company, and may be varied or discharged in the same
manner;

(b)

a contract that, if entered into by an individual, would be required by law to be in writing

and signed, may be entered into by or on behalf of the Company in writing and signed by
a person acting under the express or implied authority of the company, and may be varied
or discharged in the same manner; and

(c)

a contract that, if entered into by an individual, would be valid although entered into orally,
and not reduced to writing, may be entered into orally by or on behalf of the Company by
a person acting under the express or implied authority of the Company, and may be
varied or discharged in the same manner.

Notwithstanding the foregoing Article, an instrument is validly executed by the Company as a

deed, or an instrument under seal, if it is either:
(a)

sealed with the common seal of the Company and witnessed by a director of the
Company and/or such other person who is authorised by the Memorandum or Articles to
witness the application of the Companys seal; or

(b)

expressed to be, or is expressed to be executed as, or otherwise makes clear on its face
that it is intended to be, a deed and it is signed by a director and/or by a person acting
under the express or implied authority of the Company.

21.

Distributions

21.1

authorise a distribution dividends in money, shares, or other property by the Company at a time,
and of an amount, and to any members they think fit if they are satisfied, on reasonable grounds
that, immediately after the distribution, the value of the Company's assets will exceed the
Company's liabilities and the Company is able to pay its debts as they fall due. . In the event that

22

dividends are paid in specie the directors shall have responsibility for establishing and recording
in the Resolution of Directors authorising the dividends, a fair and proper value for the assets to
be so distributed. No distribution shall be paid on those shares which are held by the Company as
treasury shares at the date of declaration of the distribution.
21.2

The directors may, before recommending any distribution, set aside out of the profits of the
Company such sums as they think proper as a reserve or reserves which shall, at their discretion,
either be employed in the business of the Company or be invested in such investments as the
directors may from time to time think fit.

21.3

If several persons are registered as joint holders of any share, any of them may give effectual
receipt for any distribution or other monies payable on or in respect of the share.

21.4

Notice of any distribution that may have been declared shall be given to each member in manner
hereinafter mentioned and all distributions unclaimed for three years after having been declared
may be forfeited by the directors for the benefit of the Company.

21.5

No distribution shall bear interest against the Company.

22.

Company Records

22.1

The Company shall keep records that:

22.2

(a)

are sufficient to show and explain the Company's transactions; and

(b)

will, at any time, enable the financial position of the Company to be determined with
reasonable accuracy.

The Company shall keep the following records at the office of its registered agent or at such other
place or places, within or outside the British Virgin Islands, as the directors may determine:
(a)

minutes of all meetings and all resolutions of members and of classes of members; and

(b)

minutes of all meetings and all resolutions of directors and committees of directors.

Where any such records are kept at a place other than at the office of the Companys registered
agent, the Company shall provide the registered agent with a written record of the physical
address of the place or places at which the records are kept. Where the place at which any such
records is changed, the Company shall provide the registered agent with the physical address of
the new location of the records within fourteen days of the change of location.
22.3

The Company shall keep a register to be known as a register of directors containing the names
and addresses of the persons who are directors of the Company, the date on which each person
whose name is entered in the register was appointed as a director of the Company, the date on
which each person named as a director ceased to be a director of the Company, and such other
information as may be prescribed from time to time by law.

22.4

The Company shall maintain an accurate and complete register of members showing the full
names and addresses of all persons holding registered shares in the Company, the number of
each class and series of registered shares held by such person, the date on which the name of

23

each member was entered in the register of members and where applicable, the date such
person ceased to hold any registered shares in the Company.
22.5

22.6

The Company shall keep the following at the office of its registered agent:
(a)

the Memorandum and Articles of the Company;

(b)

the register of members maintained in accordance with these Articles or a copy of the
register of members;

(c)

the register of directors maintained in accordance with these Articles or a copy of the
register of directors;

(d)

copies of all notices and other documents filed by the Company in the previous ten years;

(e)

a copy of the register of charges kept by the Company pursuant to section 162(1) of the
Act; and

(f)

an imprint of the common seal.

Where the Company keeps a copy of the register of members or the register of directors at the
office of its registered agent, it shall:
(a)

within 15 days of any change in the register, notify the registered agent, in writing, of the
change; and

(b)

provide the registered agent with a written record of the physical address of the place or
places at which the original register of members or the original register of directors is
kept.

(c)

Where the place at which the original register of members or the original register of
directors is changed, the Company shall provide the registered agent with the physical
address of the new location of the records within 14 days of the change of location.

22.7

The records, documents and registers required by these Articles shall be open to the inspection
of the directors at all times.

22.8

The directors shall from time to time determine whether and to what extent and at what times and
places and under what conditions the records, documents and registers of the Company or any of
them shall be open to the inspection of members not being directors, and no member (not being a
director) shall have any right to inspect any records, documents or registers of the Company
except as conferred by the Act or authorised by a Resolution of Directors.

23.

Audit

23.1

The directors may by a Resolution of Directors call for the accounts of the Company to be
examined by an auditor or auditors to be appointed by them at such remuneration as may from
time to time be agreed.

23.2

The auditor may be a member of the Company but no director or officer shall be eligible during
his continuance in office.

24

23.3

Every auditor of the Company shall have a right of access at all times to the books of accounts of
the Company, and shall be entitled to require from the officers of the Company such information
and explanations as he thinks necessary for the performance of his duties.

23.4

The report of the auditor shall be annexed to the accounts upon which he reports, and the auditor
shall be entitled to receive notice of, and to attend, any meeting at which the Company's audited
profit and loss account and/or balance sheet is to be presented.

24.

Notices

24.1

Any notice, information or written statement required to be given to members shall be served by
mail (air-mail service if available) addressed to each member at the address shown in the share
register.

24.2

All notices directed to be given to the members shall, with respect to any registered shares to
which persons are jointly entitled, be given to whichever of such persons is named first in the
share register, and notice so given shall be sufficient notice to all the holders of such shares.

24.3

Any notice, if served by post, shall be deemed to have been served within ten days of posting,
and in proving such service it shall be sufficient to prove that the letter containing the notice was
properly addressed and mailed with the postage prepaid.

25.

Arbitration

25.1
26.1

Whenever any difference arises between the Company on the one hand and any of the members
or their executors, administrators or assigns on the other hand, touching the true intent and
construction or the incidence of consequences of these Articles or of the Act, touching anything
done or executed, omitted or suffered in pursuance of the Act or touching any breach or alleged
breach or otherwise relating to the premises or to these Articles, or to any Act or Ordinance
affecting the Company or to any of the affairs of the Company such difference shall, unless the
parties agree to refer the same to a single arbitrator, be referred to 2 arbitrators one to be chosen
by each of the parties to the difference and the arbitrators shall before entering on the reference
appoint an umpire.

26.2
25.2

If either party to the reference makes default in appointment an arbitrator either originally or by
way of substitution (in the event that an appointed arbitrator shall die, be incapable of acting or
refuse to act) for 10 days after the other party has given him notice to appoint the same, such
other party may appoint an arbitrator to act in the place of the arbitrator of the defaulting party.

26.

Continuation
The Company may, by a Resolution of Directors or by a Resolution of Members, continue as a
company incorporated under the laws of a jurisdiction outside the British Virgin Islands in the
manner provided under those laws.

27.

Winding Up

27.1

The Company may be voluntarily liquidated under Part XII of the Act if it has no liabilities and it is
able to pay its debts as they become due. A liquidator may, subject to the terms of the Act, be
appointed by a Resolution of Directors or by a Resolution of Members.

25

27.2

If the Company shall be wound up, the liquidator may, in accordance with a Resolution of
Members, divide amongst the members in specie or in kind the whole or any part of the assets of
the Company (whether they shall consist of property of the same kind or not) and may for such
purpose set such value as he deems fair upon any such property to be divided as aforesaid and
may determine how such division shall be carried out as between the members or different
classes of members. The liquidator may vest the whole or any part of such assets in trustees
upon such trust for the benefit of the contributors as the liquidator shall think fit, but so that no
member shall be compelled to accept any shares or other securities whereon there is any liability.

26

We, ICAZA, GONZALEZ-RUIZ & ALEMAN (BVI) TRUST LIMITED of Vanterpool Plaza, 2nd Floor,
Wickhams Cay I, Road Town, Tortola, British Virgin Islands for the purpose of disapplying Part IV of
Schedule 2 of the BVI Business Companies Act, 2004 hereby sign these Articles of Association this 7th
day of June, 2005.
Registered Agent

_____________________
Yexadira Garcia
Authorised Signatory
Icaza, Gonzalez-Ruiz & Aleman (BVI) Trust Limited

27

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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any
doubt about the contents of this document and the action you should take, you are recommended immediately to
seek your own advice from a person duly authorised under the Financial Services and Markets Act 2000 who
specialises in the acquisition of shares and other securities.
The Directors of Dolphin Capital Investors Limited, whose names appear on page 5 of this document, accept
responsibility both individually and collectively for the information contained in this document including
individual and collective responsibility for compliance with the AIM Rules. To the best of the knowledge of the
Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this
document is in accordance with the facts and contains no omission likely to affect its import. This document,
which constitutes an AIM admission document, has been drawn up in accordance with the AIM Rules. This
document does not contain an offer of transferable securities to the public within the meaning of section 102B of
the Financial Services and Markets Act 2000 (as amended) and is not required to be issued as a prospectus
pursuant to section 85 of the Financial Services and Markets Act 2000 (as amended).
Application has been made for the admission of the entire issued and to be issued share capital of the Company
to trading on AIM, a market operated by the London Stock Exchange plc (AIM). It is expected that dealings
in the Common Shares will commence on AIM on 8 December 2005. The rules of AIM are less demanding than
those of the Official List of the United Kingdom Listing Authority. AIM is a market designed primarily for
emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more
established companies. AIM securities are not admitted to the Official List of the United Kingdom Listing
Authority. A prospective investor should be aware of the risks of investing in such companies and should make the
decision to invest only after careful consideration and, if appropriate, consultation with an independent financial
adviser.
Neither the United Kingdom Listing Authority nor the London Stock Exchange plc has examined or approved the
contents of this document. It is emphasised that no application is being made for admission of these securities to the
Official List of the United Kingdom Listing Authority. The Common Shares are not dealt on any other recognised
investment exchange and no application has been or is being made for the Common Shares to be admitted to any
such exchange.
The whole of this document should be read. Attention is drawn in particular to the section entitled Risk Factors in
Part 1 of this document.

Dolphin Capital Investors Limited

(an international business company incorporated in the British Virgin Islands with registration number 660270)

Admission to trading on AIM

and
Placing of 104,000,000 Common Shares at 68p (A1.00) per share
Nominated Adviser
GRANT THORNTON CORPORATE FINANCE

Broker
PANMURE GORDON & CO

Grant Thornton Corporate Finance, a division of Grant Thornton UK LLP which is regulated by the Financial
Services Authority, is the Companys nominated adviser for the purposes of the AIM Rules and, as such, its
responsibilities are owed solely to the London Stock Exchange plc and are not owed to the Company or any
Director. Grant Thornton Corporate Finance will not be responsible to anyone other than the Company for
providing the protection afforded to clients of Grant Thornton Corporate Finance or for advising any other
person on the transactions and arrangements described in this document. No representation or warranty,
expressed or implied, is made by Grant Thornton Corporate Finance or as to any of the contents of this
document. Grant Thornton Corporate Finance has not authorised the contents of any part of this document.
Panmure Gordon (Broking) Limited, which is regulated by the Financial Services Authority, is acting exclusively
as the Companys broker in connection with the proposed admission of the Common Shares to trading on AIM
and will not be responsible to anyone other than the Company for providing the protections afforded to
customers of Panmure Gordon for providing advice in connection with the matters set out in this document or
any transaction or arrangement referred to herein.
The distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and
therefore persons into whose possession this document comes should inform themselves about and observe such
restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of
any such jurisdiction. Your attention is drawn to the information contained on page 2 of this document under
the heading Important Information.
Copies of this document will be available free of charge during normal business hours on any weekday (except
relevant public holidays) at the offices of Grant Thornton UK LLP, Grant Thornton House, Melton Street,
Euston Square, London NW1 2EP for the period of one month from Admission.

IMPORTANT INFORMATION
General
No person has been authorised by the Company to issue any advertisement or to give any
information or to make any representations in connection with the contents of this document and, if
issued, given or made, such advertisement, information or representation must not be relied upon as
having been authorised by the Company. This admission document does not constitute, and may not
be used for the purposes of, an offer or solicitation to anyone in any jurisdiction in which such offer
or solicitation is not authorised or to any person to whom it is unlawful to make such offer or
solicitation. The distribution of this admission document may be restricted and accordingly persons
into whose possession this document comes are required to inform themselves about and to observe
such restrictions.
Potential investors should not treat the contents of this admission document as advice relating to
legal, taxation or investment matters. Potential investors should inform themselves as to: (a) the legal
requirements within their own countries for the purchase, holding, transfer or other disposal of
Common Shares; (b) any foreign exchange restrictions applicable to the purchase, holding, transfer or
other disposal of Common Shares which they might encounter; and (c) the income and other tax
consequences which may apply in their own countries as a result of the purchase, holding, transfer or
other disposal of Common Shares. Potential investors must rely upon their own representatives,
including their own legal advisers and accountants, as to legal, tax, investment or any other related
matters concerning the Company and an investment therein. Statements made in this admission
document are based on the law and practice currently in force in the British Virgin Islands and
England and Wales and are subject to changes therein. This admission document should be read in
its entirety. All Shareholders are entitled to the benefit of, and are bound by and are deemed to have
notice of, the provisions of the Memorandum and Articles of Association of the Company.
For the attention of United States Residents
The Common Shares have not been and will not be registered under the US Securities Act of 1933,
as amended, (the Securities Act) or with any securities regulatory authority of any State or any
other jurisdiction of the United States as defined in this document and, subject to certain exceptions,
may not be offered, sold, transferred, assigned or delivered, directly or indirectly, within the United
States or to, or for the account or benefit of, US Persons (as defined in Regulation S under the
Securities Act (Regulation S)). In addition, the Company has not been and will not be registered
under the US Investment Company Act of 1940, as amended (the Investment Company Act) and
investors will not be entitled to the benefits of that Act. The Investment Manager and the
Administrator will not be required to register under the United States Investment Advisers Act of
1940, as amended. The Common Shares have not been approved or disapproved by the US Securities
and Exchange Commission, any State securities commission in the United States or any other US
regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of
the offering of Common Shares or the accuracy or adequacy of this admission document. Any
representation to the contrary is a criminal offence in the United States and re-offer or resale of any
of the Common Shares in the United States or to US Persons may constitute a violation of US law
or regulation. Any future applicants for Common Shares will be required to certify that they are not
US Persons and are not subscribing for Common Shares on behalf of US Persons.
Forward looking statements
This document contains forward looking statements. These relate to the Companys future prospects,
developments and strategies. Forward-looking statements are identified by their use of terms and
phrases such as believe, could, would, envisage, estimate, intend, seek, may,
plan, will or the negative of those, variations or comparable expressions, including references to
assumptions. These statements are primarily contained in the section headed Summary Information
and Parts 2 and 4 of this document. The forward looking statements in this document are based on
current expectations and are subject to risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by those statements.

CONTENTS
IMPORTANT INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page
2

CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXPECTED TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PLACING STATISTICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DIRECTORS, INVESTMENT MANAGER AND ADVISERS . . . . . . . . . . . . . . . . . . . . . .

SUMMARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part 1

RISK FACTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

Part 2

THE BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . .
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Product Focus . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Market Opportunity. . . . . . . . . . . . . . . . . . . . . . . .
Investment Strategy . . . . . . . . . . . . . . . . . . . . . . . .
The Prospective Investment Portfolio and Additional
Investment Process. . . . . . . . . . . . . . . . . . . . . . . . .
Founding Shareholders. . . . . . . . . . . . . . . . . . . . . .
Founding Shareholder Warrants . . . . . . . . . . . . . . .
Founding Shareholder Lock-in Agreements . . . . . . .

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Part 3

DIRECTORS, INVESTMENT MANAGER AND

Directors of the Company . . . . . . . . . . . . . . . . .
Directors of the Investment Manager . . . . . . . . .
Investment Management Agreement . . . . . . . . . .
Investment Management Fees . . . . . . . . . . . . . . .
The Administrator . . . . . . . . . . . . . . . . . . . . . . .
The Custodian. . . . . . . . . . . . . . . . . . . . . . . . . .

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Part 4

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Investment Opportunities
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THE PROSPECTIVE INVESTMENT

INVESTMENT OPPORTUNITIES . .
Location . . . . . . . . . . . . . . . . . . . . . .
Prospective Investment Portfolio . . . . .
Additional Investment Opportunities . .

PORTFOLIO AND ADDITIONAL

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Part 5

OTHER INFORMATION . . . . . . . .
Expenses . . . . . . . . . . . . . . . . . . . . .
Accounting Policies . . . . . . . . . . . . .
Shareholder Information . . . . . . . . .
Valuation Reporting and Policy . . . .
Life of the Company . . . . . . . . . . . .
Currency Issues and Cash Investment
Further Issues of Common Shares. . .
Distributions to Shareholders . . . . . .
Repurchase of Common Shares. . . . .

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Part 6

COUNTRY PROFILES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35

Part 7

THE PLACING . . . . . . . . . . .
Shares Subject to the Placing . .
Placing Arrangements . . . . . . .
Lock-in Arrangements . . . . . . .
Admission, Settlement, Dealings

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Part 8

LETTER FROM ECONOMICS RESEARCH ASSOCIATES . . . . . . . . . . . . .

40

Part 9

ACCOUNTANTS REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42

UNAUDITED FINANCIAL INFORMATION ON DOLPHIN CAPITAL

INVESTORS LIMITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

44

Part 10

TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Part 11

ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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and CREST .

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EXPECTED TIMETABLE
2005
Publication of AIM admission document

6 December

Admission of Common Shares to trading on AIM and commencement

of dealings
Delivery of Depositary Interests into CREST

8.00 a.m. on 8 December

8 December

Where applicable, definitive share certificates in respect of the

Common Shares despatched by

15 December

Save in relation to the date on which this document is published, each of the times and dates in the
above timetable are subject to change. All references to time are to GMT.

PLACING STATISTICS
Placing Price

68p (A1.00)

Number of Common Shares being issued pursuant to the Placing

104,000,000

Estimated initial Net Asset Value per Common Share on Admission

Market capitalisation at the Placing Price on Admission
Estimated net proceeds of the Placing receivable by the Company

0.65 (A0.96)
74,120,000 (A109,000,000)
67.9 million (A99.8 million)

The Placing Price of 68p equates to A1.00 per Common Share based on an exchange rate of 68p to
A1.00 as published by Bloomberg on 1 December 2005, being the last practicable date prior to the
date of this document. This exchange rate has been used throughout this document.

DIRECTORS, INVESTMENT MANAGER AND ADVISERS

Directors

Andreas Neophytou Papageorghiou (Chairman)

Cecil Harold Nicholas Moy
Cem Duna
Antonios Achilleoudis
Miltos Kambourides
All non-executive and all of:
Vanterpool Plaza
2nd Floor
Wickhams Cay 1
Road Town
Tortola
British Virgin Islands

Investment Manager
and Registered Office

Dolphin Capital Partners Limited

Vanterpool Plaza
2nd Floor
Wickhams Cay 1
Road Town
Tortola
British Virgin Islands

Nominated Adviser

Grant Thornton Corporate Finance

Grant Thornton House
Melton Street
Euston Square
London NW1 2EP
United Kingdom

Broker

Panmure Gordon (Broking) Limited

Moorgate Hall
155 Moorgate
London EC2M 6XB
United Kingdom

Solicitors to the Company

as to English Law

Lawrence Graham LLP

190 Strand
London WC2R 1JN
United Kingdom

Solicitors to the Company

as to BVI Law

Maples & Calder

Princes Court
7 Princes Street
London EC2R 8AQ
United Kingdom

Solicitors to the Placing

Travers Smith
10 Snow Hill
London EC1A 2AL
United Kingdom

Reporting Accountants

Grant Thornton UK LLP

Explorer Building
Fleming Way
Manor Royal
Crawley RH10 9GT
United Kingdom

Auditors

KPMG
Elma House
10 Mnasiadou Street
1065 Nicosia
Cyprus

Administrator
5

Anglo Irish Fund Services Limited

Jubilee Buildings
Victoria Street
Douglas
Isle of Man IM1 2SH
Custodian

Anglo Irish Bank Corporation (I.O.M.) P.L.C.

Jubilee Buildings
Victoria Street
Douglas
Isle of Man IM1 2SH

Registrar

Computershare Investor Services

(Channel Islands) Limited
Ordnance House
31 Pier Road
St. Helier
Jersey JE4 8PW

Depositary

Computershare Investor Services Plc

PO Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
United Kingdom

Property Valuer

Colliers International S.A.

18 Kifissias Ave.
151 25 Marousi, Athens
Greece

SUMMARY INFORMATION
The attention of potential investors is drawn to the Risk Factors set out in Part 1 of this document. The
Common Shares are only suitable for investors who understand the potential risk of capital loss and for
whom an investment in the Common Shares constitutes part of a diversified investment portfolio and who
fully understand and are willing to assume the risks involved in investing in the Company. This
information is derived from and should be read in conjunction with the full text of this document.
Introduction
Dolphin Capital Investors Limited is a limited liability, closed-ended, BVI incorporated real estate
investment company. The investment objective of the Company is to provide Shareholders with an
attractive level of capital growth through investing in sophisticated residential resort developments in
Southeast Europe (principally Greece, Cyprus, Turkey and Croatia) in partnership with leading
developers and operators. These developments integrate residential units with leisure facilities (such as
hotels, golf courses, polo fields, country clubs, spas and marinas).
Following almost two years of dedicated market research and deal-sourcing by the Founding Partners
of the Investment Manager, the Company was established in June 2005 and was capitalised with A5
million subscribed by the Founding Shareholders which include the Investment Manager and Fortress
Investment Group.
The Investment Manager has agreed terms and is now in the process of finalising, on behalf of the
Company, the contractual documentation relating to the Companys investment in six Projects which
comprise the Prospective Investment Portfolio. Completion of these investments would require a
minimum aggregate capital commitment of approximately A66 million. The Directors believe that the
aggregate market value of the Companys interests in the Prospective Investment Portfolio at
acquisition will be significantly greater than the Companys anticipated cost of investment.
The Company will not invest in a Project unless it is expected to achieve an IRR of at least 25 per
cent. A typical Project is anticipated to generate an IRR of between 25 and 45 per cent.
67,864,000 (A99,800,000), after expenses, is being raised by the Company for investment in the
Prospective Investment Portfolio and other potential investment opportunities that are currently being
negotiated. New Shareholders are investing in the Company at the same price per Common Share as
the Founding Shareholders.
Investment Environment
The Directors and the Investment Manager believe that the demand from Northern Europe for
properties in Residential Resorts, historically enjoyed by Spain and Portugal, is now apparent in the
less developed region of Southeast Europe. While such demand is expected to grow further over the
next five years, supply is expected to remain limited due to the time required to complete these
Projects.
The Directors and the Investment Manager believe that the Company is the first dedicated investment
vehicle to focus exclusively on investing in Residential Resorts in Southeast Europe and that the
Investment Manager is in discussions in connection with the majority of sophisticated Residential
Resorts that are expected to be launched in the next year in Greece and Cyprus. The Directors and
the Investment Manager further believe that the current lack of a competitive investment
environment, coupled with the strategic value that the Investment Manager brings to Projects, should
allow the Company to continue to negotiate investments in the forseeable future at attractive
valuations and with limited competitive pressure.
Investment Strategy
The Projects targeted by the Investment Manager are sophisticated residential developments that
combine a large number (typically several hundred) of residential units (villas, town houses,
apartments) with leisure components such as hotels, golf courses, polo fields, country clubs, spas,
marinas or other leisure facilities.
The Companys strategy is to engage the most capable partners for each Project. The Investment
Manager maintains working relationships with some of the leading regional and international
developers and operators of proven ability who are active in the Region.
The Company intends to invest in Projects at an early development stage or in strategic land sites
that can be acquired at a discount to open market value at current usage.
It is expected that the majority of the Companys investments will be in Greece, Cyprus, Turkey and
Croatia. The Company may also invest in Projects in neighbouring countries, should the Directors
7

consider that such investments would be complementary to the Companys investment portfolio or
offer attractive investment returns.
The Project investments will have a pre-determined exit route, being the sale of the residential
component usually expected within a 5 year time frame, typically on an off-plan basis. The residential
units will normally be sold through the developers or operators network, international real estate
marketing agents or residence clubs. The Company however aims to realise individual Project
investments at any stage of their development as the opportunity arises.
The investment returns that the Investment Manager is targeting rely only on the proceeds from the
sale of the residential units and not on the operation or sale of the leisure components.
Prospective Investment Portfolio and Additional Investment Opportunities
The Company has utilised its initial funds to advance a number of investment opportunities in the
Region, six of which comprise the Prospective Investment Portfolio. A substantial proportion of the
net proceeds of the Placing will be used to fund the Companys expected capital commitments to
Projects within the Prospective Investment Portfolio.
The Prospective Investment Portfolio comprises four Projects located in Greece and two Projects
located in Cyprus, further details of which are set out in Part 4 of this document. Completion of
these investments would require a minimum aggregate capital commitment of approximately A66
million. The Directors and the Investment Manager believe that all of these Projects have the
potential to become amongst the best conceived Residential Resorts in the Region.
The completion of each investment in the Prospective Investment Portfolio depends not only upon the
completion of the Placing but also, amongst other things, upon satisfactory completion of due
diligence into each of the prospective Project companies and their respective land sites and the
execution and delivery of binding agreements in a form mutually satisfactory to the parties. There can
be no guarantee that the Company will complete all or any of these investments.
In addition to the Prospective Investment Portfolio, the Investment Manager is negotiating a number
of additional investment opportunities that meet the Companys investment strategy and that have the
potential to be completed within 12 months following Admission and absorb additional capital
commitments of approximately A127 million, subject to funds being available to the Company. A
summary of the additional investment opportunities is also set out in Part 4 of this document.
Investment Process
The Investment Manager carefully selects a limited number of investment opportunities by adhering
to a thorough investment process that includes extensive market research and due diligence.
The Investment Manager specialises in matching leading local developers with its international
network of sophisticated operators, designers, master-planners and marketing agents. The Investment
Manager aims to take a hands-on investment management approach towards all Projects and work
with its partners to create maximum value throughout the development and realisation process by
utilising its financial skills and access to an extensive network of debt providers and investors.
The Company intends to commit to the Projects the minimum amount of capital required to purchase
the land and/or to finance the Projects initial infrastructure (such as roads, utilities, landscaping and
leisure components). Capital is typically provided in stages as the planning and development process
progresses. The Company seeks to protect itself from planning or other development risks by only
investing in (a) Projects that have the required permits in place (b) land options or (c) land sites at a
price below their market land value and with sufficient planning visibility.
The Company aims to optimise the capital and tax structure of its investments through efficient use
of equity, bank debt and participating loans and by investing through special purpose vehicles for
each Project. Most of the Projects development costs will be funded via pre-sales of the residential
units and construction loans secured on the land. Each Projects debt commitments will be ringfenced in the special purpose vehicle with no recourse to the Company. The Directors do not
currently anticipate that the Company itself will borrow any funds.
Founding Shareholders
The Company was capitalised with A5 million in the summer of 2005 by institutional and private
investors including the Investment Manager. The lead investor was Fortress, a world-leading investor
in real estate private equity with approximately $15 billion of equity capital currently under
management. Wes Edens, Chairman and co-founder of Fortress, Rob Kauffman, President and cofounder of Fortress and three other Fortress managing partners invested personally in the Company.
8

In June 2005, Fortress listed one of its wholly-owned real estate companies, Mapeley Limited, on the
London Stock Exchange and Mapeley Limited thereby became one of the largest real estate
companies quoted in the UK with a market capitalisation of approximately 575 million. While at
Soros Real Estate Partners, Miltos Kambourides, the founder and managing partner of the
Investment Manager, was the deal leader in relation to the establishment of Mapeley Limited, which
was a co-investment between Soros Real Estate Partners and Fortress until early 2005 when Fortress
acquired full ownership of Mapeley Limited. Miltos Kambourides was the financial architect of the
two major real estate outsourcing deals that Mapeley Limited currently has under management.
Investment Manager
The principals of the Investment Manager possess a combination of extensive local knowledge and
contacts together with an international network of professionals and real estate investment expertise
gained at some of the most reputable financial institutions in the world, such as Soros, Goldman
Sachs, JP Morgan, Citibank, CSFB and GE Capital. The Investment Managers four senior
investment professionals have collectively over 40 years of relevant investment experience. Miltos
Kambourides was a co-founding partner of Soros Real Estate Partners which has been one of the
biggest foreign investors in the master-planned leisure-integrated residential sector in Spain achieving
returns in excess of the minimum returns currently targeted by the Company.
Board of Directors of the Company
The Board of Directors of the Company comprises four independent non-executive Directors and
Miltos Kambourides. Further details of each Directors background are set out in Part 3 of this
document.
Distributions
The Companys intention is to maximise the IRR of each Project and therefore it intends to return
capital profits as soon as they are realised. For the first three years following Admission only, the
profits realised from Projects (net of any performance fees due) could be made available for
reinvestment into further Projects as determined by the Board.
It is the intention that the Investment Manager will utilise the net proceeds of the Placing to progress
and complete the Companys investments in the Prospective Investment Portfolio. To the extent that
the Company has sufficient funds available; either from the balance of the seed capital of the
Company and the net proceeds of the Placing, or arising from potential further fund raisings or, as
explained above, from the realisation of its investments in the first three years; it will use these to
progress other investment opportunities.
Life of the Company
The Company does not have a fixed life, however, shortly before the tenth anniversary of Admission
(or earlier if appropriate) the Board will convene a Shareholders meeting at which a resolution will
be proposed to determine the future of the Company.
Management Fees and Admission Expenses
The Investment Manager will receive an annual management fee payable quarterly in advance of 2
per cent. per annum of the total funds raised by the Company (being initially the gross proceeds of
the Placing and the A5 million subscribed by the Founding Shareholders). The Investment Manager
will also be paid a performance fee equal to 20 per cent. of the net realised cash profits received by
the Company from each Project, after achieving a hurdle of 8 per cent. annual compounded return.
The performance fee is subject to escrow and claw-back provisions (described in Part 3 of this
document) and is structured to fully align the interests of the Investment Manager with those of
Shareholders.
The Company will be incurring costs in connection with the Placing and the application for
Admission. These expenses will be met by the Company. Such expenses will include fees payable
under the Placing Agreement, registrars fees, depositarys fees, admission fees, printing costs, legal,
advisory and accounting fees and any other applicable expenses. The Directors do not anticipate that
these expenses will exceed 4.0 per cent. of the gross proceeds of the Placing.
There are no upfront fees payable to the Investment Manager.
9

Founding Shareholder Warrants

The Founding Shareholders provided the initial equity capital necessary to establish the Company and
to fund the cost of negotiating and advancing a number of investment opportunities including the
Prospective Investment Portfolio. The Directors believe that the aggregate market value of the
Companys interests in the Prospective Investment Portfolio at acquisition will be significantly greater
than the Companys cost of investment. In recognition of the fact that new Shareholders will be
investing in the Company at the same price per Common Share as the Founding Shareholders, the
Company has issued the Founding Shareholder Warrants. The Investment Manager owns 20 per cent.
of the Founding Shareholder Warrants.
The Founding Shareholder Warrants entitle the Founding Shareholders to subscribe, at par value per
Common Share of A0.01, for such number of Common Shares (capped at 12.5 million Common
Shares) which when multiplied by the Placing Price of 68 pence (A1.00) equals 50 per cent. of the
difference between the market value of the Companys legal interests in the Prospective Investment
Portfolio at acquisition and its cost of investment. The valuation of the Companys legal interests in
the Prospective Investment Portfolio will be carried out by the Property Valuer, as at 30 June 2006,
and this valuation will then be approved by the Board. The Founding Shareholders have also entered
into individual lock-in agreements in relation to their Common Shares which prevent them from
disposing of such shares until the date on which the Founding Shareholder Warrants lapse.
The Placing
67,864,000 (A99,800,000), after expenses, is being raised by the Company for investment in the
Prospective Investment Portfolio and other potential investment opportunities that are currently being
negotiated. The Placing Price is 68 pence (A1.00) per Common Share.
Pursuant to the terms of the Placing Agreement, Panmure Gordon has agreed, as agent of the
Company, to use its reasonable endeavours to procure subscribers for all of the Placing Shares. The
Placing is not being underwritten.

10

PART 1
RISK FACTORS
Investment in the Company constitutes a high risk investment and prospective purchasers of Common
Shares should carefully evaluate the factors set out below. Investment in the Company should be
regarded as speculative and, given the inherent illiquidity of the Companys proposed underlying property
assets, should be considered long term in nature and suitable only for sophisticated investors who
understand the risks involved, including the risk of a total loss of capital.
THE COMPANY
The Company operates in a market which may become competitive for investment opportunities
It is possible that some entities may in the future compete with the Company to make the types of
investments that the Company intends to make. In some instances, the Company may compete with
wealthy local entrepreneurs and other sources of financing, including traditional financial services
companies such as commercial banks and speciality finance companies. There can be no assurance
that the Company will not, in the future, face competitive pressures that could have a material
adverse effect on the Companys investment returns. Also, as a result of this potential competition,
the Company may not be able to take advantage of attractive investment opportunities from time to
time, and the Company can offer no assurance that it will be able to identify and make investments
that are consistent with the Companys investment strategy, or that it will be able to fully invest its
available capital.
The Company may experience fluctuations in its results
The Company may experience fluctuations in its operating results due to a number of factors,
including the rate at which the Company makes new investments, the interest rates payable on debt
capital to fund the Projects, the level of expenses, variations in and the timing of the recognition of
realised and unrealised gains or losses, the degree to which it encounters competition in its markets
and general economic conditions. Accordingly, results for any period should not be relied upon as
being indicative of performance in future periods.
Life of the Company
Shortly before the tenth anniversary of Admission, the Board will convene a Shareholders meeting at
which a resolution will be proposed to wind-up the Company. Unless Shareholders vote to wind-up
the Company, Shareholders will only be able to realise their investment by selling their Common
Shares.
Future issues of Common Shares could dilute the interest of existing Shareholders and lower the price of the
Common Shares
The Company may issue additional Common Shares without limitation. The Company is not required
under BVI law to offer any such Common Shares to existing Shareholders on a pre-emptive basis.
Therefore, it may not be possible for existing Shareholders to participate in such future issues of
Common Shares, which would dilute the existing Shareholders interests in the Company. The issue of
additional Common Shares by the Company, or the possibility of such issue, may cause the market
price of the Common Shares to decline. However, it should be noted that the Company cannot issue
further Common Shares at a subscription price that is less than the prevailing Net Asset Value per
Common Share.
THE INVESTMENT MANAGER
The Companys financial condition and results of operations will depend on its, and the Investment Managers
ability to manage investments effectively
The Companys ability to implement its investment strategy will depend on the Investment Managers
ability to identify, analyse, invest in and finance Projects that meet the Companys investment criteria.
Accomplishing this result on a cost-effective basis is largely a function of the Investment Managers
structuring of the investment process, its ability to provide competent, attentive and efficient services
to the Company and the Companys access to financing on acceptable terms. Failure by the
Investment Manager to manage investments effectively could have a material adverse effect on the
Companys business, financial condition and results of operations.
The Companys performance is dependent on the Investment Manager, and the Company may not find a
suitable replacement if the Investment Manager terminates the Investment Management Agreement,
ceases to operate or its principals leave
11

The Company has no employees and no separate facilities and is reliant on the Investment Manager,
which has significant discretion as to the implementation of the Companys operating policies and
strategies. The Company is subject to the risk that the Investment Manager will terminate the
Investment Management Agreement and that no suitable replacement will be found or exists. In
addition, the Directors believe that the Companys success depends to a significant extent upon the
experience of the Investment Managers executive officers (particularly Miltos Kambourides and Pierre
Charalambides), whose continued service is not guaranteed. The departure of a key executive of the
Investment Manager may have an adverse effect on the performance of the Company.
REGULATORY
Changes in laws or regulations governing the Groups operations may adversely affect the Companys business
The Company and its investments will be subject to regulation and laws imposed by the countries in
which they operate. These laws and regulations, as well as their interpretation, may be changed from
time to time. Accordingly, any change in these laws or regulations could have a material adverse
effect on the Companys business.
Limited regulatory control
The holders of the Common Shares will not enjoy any protections or rights other than those reflected
in the Articles and those rights conferred by the AIM Rules and applicable law. Neither the Listing
Rules nor the Disclosure Rules of the FSA nor the Combined Code on Corporate Governance issued
by the Financial Reporting Council will apply to the Company.
Shareholders will not be entitled to the takeover offer protections provided by the City Code on Takeovers and
Mergers
The City Code applies, inter alia, to offers for all listed public companies considered by the Panel on
Takeovers and Mergers to be incorporated or resident in the United Kingdom, the Channel Islands
or the Isle of Man. The Company will not be so incorporated or resident and therefore Shareholders
will not receive the benefit of the takeover offer protections provided by the City Code. See
paragraph 4.13 of Part 11 of this document for details of BVI law on takeovers.
Legal systems and enforcement in the Region
The relevant legal systems in the various countries in the Region may not afford to the Company the
same level of certainty in relation to issues such as title to property-related rights as may be achieved
in more developed markets. Enforcement of legal rights in the Region may prove expensive and
difficult to achieve.
Taxation
The Company and/or Shareholders may in the future be subject to income or other tax in the
jurisdictions in which investments are made. Additionally, withholding tax or branch tax may be
imposed on earnings of the Company from investments in such jurisdictions. Local tax incurred in
other jurisdictions by the Company or vehicles through which it invests may not be creditable to or
deductible by Shareholders in their respective jurisdictions.
If under BVI law there were to be a change to the basis on which dividends could be paid by BVI
companies, this could have a negative impact on the Companys ability to pay dividends. Any change
in the Companys tax status or in taxation legislation could affect the value of the investments held
by and the performance of the Company. Representations in this document concerning the taxation
of investors in Common Shares are based upon current tax law and practice which is subject to
change.
The attention of investors is drawn to Part 10 of this document which contains further information
on taxation.
Enforcement of judgements in the BVI
As a Company incorporated under the IBCA, the rights of Shareholders will be governed by BVI law
and the Companys Memorandum of Association and Articles. The rights of Shareholders under BVI
law differ from the rights of Shareholders of companies incorporated in other jurisdictions. For
example, there are very limited statutory protection rights for minority shareholders.
Any final and conclusive monetary judgment obtained against the Company in the courts of England
and Wales or those countries listed in the BVI Reciprocal Enforcement of Judgements Act (Cap. 65)
1991, for a definite sum, may be registered and enforced as a judgment of the BVI court if
application is made for registration of the judgment within twelve months or such longer period as
the court may allow, and if the BVI court considers it just and convenient that the judgment be so
12

enforced. Alternatively, the judgment may be treated as a cause of action in itself so that no retrial of
the issues would be necessary. In either case, it will be necessary that in respect of the foreign
judgment:
1.

the foreign court issuing the judgment had jurisdiction in the matter and the judgment debtor
either submitted to such jurisdiction or was resident or carrying on business within such
jurisdiction and was duly served with process;

2.

the judgment given by the foreign court was not in respect of penalties, taxes, fines or similar
fiscal or revenue obligations of the Company;

3.

in obtaining judgment there was no fraud on the part of the person in whose favour judgment
was given, or on the part of the foreign court;

4.

recognition or enforcement of the judgment in the BVI would not be contrary to public policy;

5.

the proceedings pursuant to which judgment was obtained were not contrary to natural justice;
and

6.

the judgment given by the foreign court is not the subject of an appeal.

Any final and conclusive monetary judgment obtained against the Company in the courts of all
countries not covered the BVI Reciprocal Enforcements of Judgements Act (Cap. 65) 1991 for a
definite sum, may be treated by the courts of the BVI as a cause of action in itself so that no retrial
of the issues would be necessary provided that in respect of the foreign judgment:
1.

the foreign court issuing the judgment had jurisdiction in the matter and the Company either
submitted to such jurisdiction or was resident or carrying on business within such jurisdiction
and was duly served with process;

2.

the judgment given by the foreign court was not in respect of penalties, taxes, fines or similar
fiscal or revenue obligations of the Company;

3.

in obtaining judgment there was no fraud on the part of the person in whose favour judgment
was given or on the part of the court;

4.

recognition or enforcement of the judgment in the BVI would not be contrary to public policy;
and

5.

the proceedings pursuant to which judgment was obtained were not contrary to natural justice.

Regulatory status of the Investment Manager

The Investment Manager will not (nor will its personnel) be subject to regulation by the FSA or any
other financial services regulator. Accordingly, the Investment Manager will not be subject to the
requirements applicable to persons who are authorised by the FSA to provide investment
management and similar services in the United Kingdom.
RISKS RELATING TO AIM
Risk attaching to the market in Common Shares
Since the Common Shares have not previously traded, their market value is uncertain. There can be
no assurance that the market will value the Common Shares at the Placing Price. Following
Admission the market price of the Common Shares may be volatile and may go down as well as up
and investors may therefore be unable to recover their original investment. The Companys operating
results and prospects from time to time may be below the expectations of market analysts and
investors. At the same time, stock market conditions may affect the Common Shares regardless of the
operating performance of the Company. Stock market conditions are affected by many factors, such
as general economic outlook, movements in or outlook on interest rates and inflation rates, currency
fluctuations, commodity prices, changes in investor sentiment towards particular market sectors and
the demand and supply of capital. Accordingly, the market price of the Common Shares may not
reflect the underlying value of the Companys net assets, and the price at which investors may dispose
of their Common Shares at any point in time may be influenced by a number of factors, only some
of which may pertain to the Company while others of which may be outside the Companys control.
Lack of liquidity of the Common Shares
Although the Company has applied for the Common Shares to be admitted to trading on AIM, no
assurance can be given that at any time after Admission a liquid market for the Common Shares will
develop. In the future, Shareholders who need to dispose of their Common Shares may be forced to
do so at prices that do not fully reflect the Net Asset Value per Common Share.
13

AIM
Application has been made for the Common Shares to be admitted to AIM, a market designed
primarily for emerging or smaller companies to which a higher investment risk tends to be attached
than to larger or more established companies. An investment in shares quoted on AIM may carry a
higher risk than an investment in shares quoted on the Official List. AIM has been in existence since
June 1995 but its future success, and liquidity in the market for the Companys securities, cannot be
guaranteed.
UNDERLYING INVESTMENTS
Gearing
Some of the Project companies may utilise a leveraged capital structure, in which case a third party
would be entitled to cash flow generated by such investments prior to the Company receiving a
return. While such leverage may increase returns or the funds available for investment by the Project
company, it also will increase the risk of loss on a leveraged investment. If the Project company
defaults on secured indebtedness, the lender may foreclose and the Project company could lose its
entire investment which may have been used as security for such loan.
Nature of investment in the Company
Investment in the Company requires a long term commitment, with no certainty of return. Many of
the Companys investments might be illiquid, and there can be no assurance that the Company will
be able to realise financial returns on such investments in a timely manner. There may be little or no
near term cash flow available to Shareholders. Partial or completed sales, transfers, or other
dispositions of investments which may result in a return of capital or the realisation of gains, if any,
are generally not expected to occur for a number of years after an investment is made.
Risk of limited number of investments
The Company may participate in a limited number of investments and, as a consequence, the
aggregate return of the Company may be substantially adversely affected by the unfavourable
performance of even a single investment. Other than as set forth above, investors have no assurance
as to the degree of diversification in the Companys investments, either by geographic region or asset
type.
General real estate risks
Investments will be subject to the risks inherent in the ownership and operation of real estate and
real estate related businesses and assets. Risks include those associated with general economic climate,
local real estate conditions, changes in supply of, or demand for, competing properties in an area,
energy and supply shortages, various uninsured or uninsurable risks, natural disasters, government
regulations, changes in real property taxes and interest rates. As a result, a downturn in the real
estate sector or the materialisation of any one or a combination of the aforementioned risks could
materially adversely affect the Company.
Development risks
The Company may acquire interests in real estate projects and/or in businesses that engage in real
estate development. To the extent that the Company invests in such development activities, it will be
subject to the risks normally associated with such activities such as cost overruns. Projects under
development may generate little or no cash flow from the date of acquisition through to the date of
completion of development, if completed, and may experience operating deficits after the date of
completion.
Investments with third parties in joint ventures and other entities
The Company intends to co-invest with third parties through special purpose vehicles and may
acquire non-controlling interests. Although the Company may not have control over these investments
and therefore, may have a limited ability to protect its position therein, the Investment Manager
expects that appropriate rights will be negotiated to protect the Companys interests. Nevertheless,
such investments may involve risks not present in investments where a third party is not involved,
including the possibility that a third party partner or co-venturer may have financial difficulties
resulting in a negative impact on such investment, may have economic or business interests or goals
which are inconsistent with those of the Company, or may be in a position to take action contrary to
the Companys investment objectives. In addition, the Company may in certain circumstances be
liable for the actions of its third party partners or co-venturers.
14

Developer and counterparty risk

If projected returns on investment properties are not met or if special purpose vehicles in which the
Company has invested become insolvent, the Company may lose some or all of its investment.
Developers may become insolvent and fail to complete a development in which the Company has
invested. Although deposit amounts are generally held in escrow, they might not be in all cases and
developer insolvency may result in loss to the Company. Counterparties to whom the Company sells
investment properties may default on payment of the purchase price.
THE REGION
Regional real estate risks
In certain of the countries in the Region land ownership rights may not be appropriately registered
with the respective land registry authorities and may give rise to ownership disputes for wrongful
misappropriation.
Risk of military conflict
Some countries of the Region have in the previous decades been involved in military conflict and
there is no guarantee that future events and circumstances will not again result in military conflict.
Risk of political instability
Investments in the Region can be subject to political risk. Non-European Union countries may have
not yet formulated clear policies or established legislative frameworks from which to regulate rapidly
developing sectors. As these countries continue to develop legislation, existing laws may be changed.
Legislative changes and international initiatives
Changes in government regulations and policies of the BVI, Cyprus, Turkey, Greece and Croatia and
international initiatives of organisations such as the Organisation for Economic Co-operation and
Development and the Financial Action Task Force aimed at offshore jurisdictions may adversely
affect the financial performance of the Company.
RISKS ASSOCIATED WITH THE PROSPECTIVE INVESTMENT PORTFOLIO
No guarantee that investments will be made
Although the Company has entered into preliminary agreements in respect of some of the Projects
within the Prospective Investment Portfolio there can be no guarantee that the Company will
ultimately be able to invest in any of the Projects comprised within the Prospective Investment
Portfolio on terms satisfactory to it or at all. Investments in the Prospective Investment Portfolio will
be conditional, amongst other things, on the Company being able to finance its commitments to a
particular Project, satisfactory completion of due diligence, and the entering into of binding
agreements in a form satisfactory to all the parties thereto including the Company.
GENERAL
Currency and inflation risk and hedging policies
Although the Companys funds will be converted into and held in Euros, some of its investments are
expected, at least initially, to be made in other currencies. Thus, the Companys investments may be
subject to currency and inflation risks. The Company intends to consult with reputable local and/or
international financial institutions on an ongoing basis to minimise the negative effects of such risks.
In instances where currency is perceived to be a substantial risk factor, the Investment Manager may
attempt, but is not obliged, to structure investments using Euro-denominated financial structures or
hedging instruments that might help mitigate such risks. In connection with certain investments, the
Company may employ hedging techniques designed to protect itself against adverse movements in
currency and/or interest rates and other risks. While such transactions may reduce certain risks, such
as unanticipated changes in interest rates, securities prices, or currency exchange rates, they may
result in a poorer overall performance for the Company than if it had not entered into such hedging
transactions.
The foregoing factors are not exhaustive and do not purport to be a complete explanation of all the
risks and significant considerations involved in investing in the Company. Accordingly and as noted
above, additional risks and uncertainties not presently known to the Directors, or that the Directors
currently deem immaterial, may also have an adverse effect on the Companys business.

15

PART 2
THE BUSINESS
Introduction
Dolphin Capital Investors Limited is a limited liability, closed-ended, BVI incorporated real estate
investment company. The investment objective of the Company is to provide Shareholders with strong
capital growth combined with a low risk profile through investing in sophisticated leisure-integrated
residential resort developments in Southeast Europe (principally Greece, Cyprus, Turkey and Croatia)
in partnership with leading developers and operators.
The Companys assets are managed by Dolphin Capital Partners Limited, an investment management
company incorporated in the BVI in February 2005. The business was founded in April 2004 by
Miltos Kambourides and Pierre Charalambides after leaving Soros Real Estate Partners, and has
exclusively focused on sourcing and negotiating investment opportunities in the Region.
The Investment Manager is using its experience, and what it believes is its first mover advantage, to
select the best investment opportunities in the Region, to become the preferred source of capital to
developers of Residential Resorts and to achieve strong capital appreciation by aligning the
Companys interests with them.
Since incorporation on 7 June 2005, the Company has raised A5 million of seed capital from the
Founding Shareholders. The Company has utilised these funds to advance a number of investment
opportunities in the Region, six of which comprise the Prospective Investment Portfolio. Completion
of these investments would require a minimum aggregate capital commitment of A66 million.
The Directors believe that the aggregate market value of the Companys interests in the Prospective
Investment Portfolio at acquisition will be significantly greater than the Companys anticipated cost of
investment. The Companys anticipated commitments to Projects within the Prospective Investment
Portfolio will be met out of the proceeds of the Placing.
The Investment Manager is also negotiating a number of additional investment opportunities in the
Region that meet the Companys investment strategy, which could be executed in the next 12 months
following Admission and absorb additional capital commitments of approximately A127 million,
subject to funds being available to the Company.
Product Focus
The investments targeted by the Investment Manager are Master-planned Leisure-integrated
Residential Resorts. These are sophisticated developments and include a large number (typically
several hundred) of holiday, second or retirement home units (villas, town houses, apartments)
integrated with a combination of leisure components such as hotels, golf courses, polo fields, country
clubs, spas, marinas or other facilities. These Projects are typically located by or close to the sea, in
an attractive natural landscape and within driving distance from an airport. They also offer
comprehensive community services such as security, maintenance, facilities and property management
and replicate a product that has proved popular and has experienced success in Southwest Europe
and the US.
The Directors and the Investment Manager believe that residential property buyers from Northern
Europe and Russia typically prefer Residential Resorts over single residential property units because
these developments offer a high-quality standard of living without the burden of maintenance and
dealing with local authorities and service providers. An added attraction for buyers is the potential to
generate rental income from the resorts management company while the residential unit is not in use.
The Directors and the Investment Manager believe that the countries which offer the most attractive
locations for such Projects are Greece, Cyprus, Turkey and Croatia. The Companys investment
activity is concentrated on these four countries with particular emphasis being given to Greece and
Cyprus. The Company may also invest in Projects in neighbouring countries, should the Directors
consider that such investments would be complementary to the Companys investment portfolio or
offer attractive investment returns.
Market Opportunity
Although demand for holiday, second or retirement homes in Southeast Europe has always existed,
the Directors believe that a confluence of current trends will cause such demand to grow significantly.
Firstly, the number of retirees in Northern Europe is growing rapidly and these retirees are
increasingly moving overseas often incentivised by the pensions policy their own government.
According to a report by Alliance & Leicester (entitled The New Age of Retirement Migration), in
16

excess of 2.3 million people aged over 50 are expected to leave the United Kingdom over the next
seven years to retire abroad. Secondly, retirees and holiday and second home buyers are also
becoming increasingly mobile, in particular within the European Union. Thirdly, there is growing
demand from Russia. Finally, the Directors anticipate a shift in demand to Southeast Europe as the
traditional markets of Southern France, Spain and Portugal are becoming over-developed and
expensive.
In terms of supply, the Directors believe that Southeast Europe has considerable scope for Masterplanned Leisure-integrated Residential Resorts. The Directors believe there is currently only one
completed Project in the Region, Aphrodite Hills (www.aphroditehills.com) located in Cyprus, which
has enjoyed strong demand, achieving residential sales prices at least two times those originally
planned. In Southwest Europe (Spain and Portugal) more than two hundred such Projects have been
successfully developed. As illustrated by the following table, simply by virtue of a comparison of key
measurements such as tourist arrivals, land size, shoreline, international airports, availability of
beaches, golf courses and completed projects with golf, the Directors and the Investment Manager
believe that Southeast Europe could sustain today more than one hundred such Projects.

Indicators
Tourist arrivals (2004)
Growth in tourist arrivals from 2003
Area
Shoreline
International airports (2004)
Number of Blue Flag beaches (2005)
Golf courses (2004)
Completed projects with golf (2004)

Southwest Europe
(Spain and Portugal)
65 million
3%
597,000 m2
6,757 km
18
669
333
200+ (estimated)

Southeast Europe
(Greece, Cyprus, Turkey and Croatia)
43 million
10%
978,000 m2
27,359 km
17
699
20
1

The Directors and the Investment Manager believe that, in terms of regional competitiveness,
Southeast Europe is now very well positioned to offer a highly attractive product as the Region has
many advantages, including:
*
*
*
*
*
*

*
*
*
*
*

availability of undeveloped seafront locations at attractive prices;

unspoilt nature, clean waters and historic sites;
excellent climate and a long season;
hospitable culture and low crime rates;
upcoming golf destinations;
low cost bases regarding land, labour and construction costs and living expenses (Turkey and
Croatia);
improving infrastructure and transportation;
EU convergence (Turkey and Croatia);
increasing political and economic stability;
significant recent rise in tourism; and
enhanced profile resulting from the Athens 2004 Olympics.

Due to the size, the profile and the time required for launching and completing such Projects,
potential future supply is very visible. The Directors and the Investment Manager believe that no
more than 20 such Projects will be launched in the next one to two years in Greece and Cyprus and
that the Investment Manager is in discussions in connection with the majority of them.
The Company aims to capitalise on what the Directors and the Investment Manager believe to be a
compelling demand versus supply imbalance that exists today and benefit from the evolution of the
market which is at a stage that resembles Spain and Portugal in the mid-1990s after the Barcelona
1992 Olympics.
Investment Strategy
The Directors and the Investment Manager believe that Dolphin Capital Investors Limited is the first
dedicated investment vehicle to focus exclusively on investing in Residential Resorts in Southeast
Europe. Further, the Directors and the Investment Manager believe that the current lack of a
competitive investment environment, coupled with the strategic value that the Investment Manager
brings to the Projects, should allow the Company to continue to negotiate investments in the
foreseeable future at attractive valuations and with limited competitive pressure.
17

The Companys strategy is to engage the most capable partners for each Project. The Investment
Manager maintains working relationships with some of the leading regional and international
developers and operators of proven ability who are active in the Region.
The Company intends to invest in Projects at an early development stage or in strategic land sites
that can be acquired at a discount to open market value at current usage. The Companys
investments will be made through special purpose vehicles established specifically for each Project.
The Company will either control these vehicles or have minority interest protection rights.
As part of the due diligence process on each prospective investment, the Investment Manager will
obtain a valuation from a third party property valuer, such as Colliers International, of the land
owned or to be acquired by the relevant Project company. The Company will typically invest in
Projects at an entry price which is lower than the relevant market value of the land.
The Company seeks to minimise planning or other development risks by investing into (a) Projects
with all permits in place, (b) land options, or (c) land sites at a price below market value and with
sufficient planning visibility. In most cases, the Company will have a right to demand a refund of its
investment if planning permission is not granted within a specified timetable and its investment will
be secured over all the shares or land of the Project company.
Each Project should be substantial enough to generate residential unit sales of at least A50 million
and require at least a A5 million capital commitment from the Company. The Company will not
invest in Projects unless the Directors and the Investment Manager believe that they will generate a
minimum IRR of 25 per cent. A typical Project is anticipated to generate an IRR of between 25 and
45 per cent.
The targeted investment return relies only on the proceeds from the sale of the residential units and
not on the operational income or sale of the leisure component. The residual leisure assets such as
golf courses, hotels, polo fields, country clubs, spas and marinas and other leisure facilities will
typically be sold to other investors, or returned to the developers at a pre-agreed price, or passed on
to the residents.
The Companys investments in Residential Resorts will have a pre-determined exit route, being the
sale of the residential component usually expected within a 5 year time frame typically on an off-plan
basis. The residential units will normally be sold through the developers or operators network,
international real estate marketing agents or residential clubs. The Company will aim to realise
individual Project investments at any stage of their development as the opportunity arises. Other
possible exit routes include (a) the sale of the land or parts of it to other developers when all the
permits are in place, (b) the sale of shares in the Project company to other investors, (c) the
refinancing of a Project based on the future sales proceeds when the residential unit pre-sales are
concluded, or (d) the listing of the Project company on a stock exchange.
The Directors believe that the Investment Managers regional approach will enable the Company to
(a) diversify risk, (b) generate cross-border partnerships and local know-how transfer among
development partners, (c) reduce costs (as duplication could be eliminated in certain cost aspects of
developments), and (d) create scale and support a pan-European marketing distribution network
promoting a wider product range. Furthermore, most international developers and operators are
typically more interested in doing business regionally rather than locally.
The Directors and the Investment Manager believe that the Companys investment approach offers an
attractive risk/reward profile to Shareholders in a compelling market environment at an optimal time
for investment in residential resort developments in Southeast Europe.
Prospective Investment Portfolio and Additional Investment Opportunities
Starting with dedicated regional market research and network building while at Soros Real Estate
Partners, and following extensive deal-sourcing and negotiations since its business was founded in
April 2004, the Investment Manager has agreed terms and is now finalising the contractual
documentation relating to six investments (collectively comprising the Prospective Investment
Portfolio) on behalf of the Company which, if completed, would require a minimum aggregate capital
commitment by the Company of approximately A66 million. The successful completion of the
investments represented by the Prospective Investment Portfolio would establish the Company as the
leading investor in the Residential Resort sector in Southeast Europe.
The Prospective Investment Portfolio comprises four projects located in Greece and two projects
located in Cyprus as summarised in the following table. The Directors and the Investment Manager
believe that all of these Projects have the potential to become among the best conceived Residential
Resorts in the Region. Further details setting out the background to, and the contractual status of,
each Project within the Prospective Investment Portfolio are set out in Part 4 of this document.
18

Estimated
Company
investment
(Am)

Project

Expected
Company
shareholding
(%)

Expected to
be fully
funded within
(months)

GREECE
Amanmila
Kilada Hills
Kyparissia Bay
Scorpio Bay
CYPRUS
Artemis Hills
Apollo Heights

5
14*
10
9

33.3
80.0
100.0
50.0

12
6
6
12

9
19

25.0
68.1

6
18

Total

66

Additional A9 million may be required if a further option is exercised to acquire adjacent land and expand the Kilada Hills Project.

The completion of each investment in the Prospective Investment Portfolio depends not only upon the
completion of the Placing but also, amongst other things, satisfactory completion of due diligence
into each of the prospective Project companies and their respective land sites and the execution and
delivery of binding agreements in a form mutually satisfactory to the parties. There can be no
guarantee that the Company will complete all or any of these investments.
In addition to the Prospective Investment Portfolio, the Investment Manager has advanced
negotiations in a number of additional investment opportunities that meet the Companys investment
strategy and that have the potential to be executed within 12 months following Admission. Most of
these Project opportunities stem from the strategic relationships that the Investment Manager has
with some of the leading developers and operators in the Region. Further details of these additional
investment opportunities are set out in Part 4 of this document.
The Investment Manager anticipates that, should negotiations be successful in respect of these
additional investment opportunities, an additional capital commitment of approximately A127 million
would be required from the Company, subject to funds being available. However, the Investment
Manager does not anticipate that all of these opportunities will materialise or that the Company will
reach a binding agreement to invest in more than 50 per cent. of them. Nevertheless, when combined
with the Prospective Investment Portfolio, they further underline the Companys strong investment
potential in the Residential Resort sector in the Region.
Investment Process
Sourcing and Execution
The Investment Manager carefully selects a limited number of potential Projects by adhering to a
thorough investment process that includes extensive due diligence and market research.
The Investment Manager delegates the technical due diligence to some of the Regions leading project
managers and technical advisers, the preferred provider being Focal Project Managers S.A. Technical
due diligence includes reviewing the land zoning status, the legislative framework, the permit status,
environmental, forestry and archeological issues and licensing requirements. In addition to providing a
full technical due diligence report, the project manager further provides a budget estimate of the
Project which is then used as verification by the Investment Manager.
The Investment Manager always aims to engage leading local law firms to perform the legal due
diligence and draft all the investment documents, as well as leading accounting firms to undertake the
requisite accounting and financial due diligence.
Subject to completion of satisfactory due diligence, the Investment Manager recommends the
investment opportunity to the Board for approval.
Once the Company has committed to a Project following Board approval, the Investment Manager
engages a project manager to supervise the development and construction process. The Project
company will then be required to enter into a number of development and construction related
contracts. The project manager undertakes to establish schedule and cost control procedures with the
contractors, monitor the ongoing procurement process and quality of the development, and provide
the Investment Manager with regular update reports that identify any potential deviations from the
pre-agreed business plan.
19

The Investment Manager takes a hands-on management approach towards all Projects and works
with its partners to create maximum value throughout the development and realisation process by
utilising its financial skills and access to an extended network of debt providers and real estate
investors.
The Company intends to have control over the majority of Projects in which it invests. In Projects
where the Company is a minority shareholder, minority protection rights will be achieved through
appropriate provisions set out in shareholders agreements. Each shareholder agreement will have a
specific business plan attached to which the developer will be required to adhere.
When appropriate, the Investment Manager and its development partners will involve the original
land owners and other local partners in the Project, particularly where this involvement strengthens
the Projects ability to obtain the required local planning permits and licenses and/or improves the
lines of communication with local authorities and construction management. Execution risk is
minimised by partnering with trusted developers and by fully aligning their economic interests with
those of the Company.
Project Funding
The Company intends to commit to Project companies the minimum level of capital required to
purchase the land and/or to finance the Projects initial infrastructure (such as roads, utilities,
landscaping and leisure components). Funding of the commitment is usually provided in stages
depending on the planning and development progress.
The Investment Manager aims to optimise the capital and tax structure of its investments through
efficient use of equity, bank debt and participating loans and by investing through special purpose
vehicles for each Project. Most of the Projects development costs will be funded via pre-sales of the
residential units and construction loans secured on the land. Each Projects debt commitments will be
ring-fenced in a special purpose vehicle with no recourse to the Company. Each Project company will
seek to minimise local taxes by utilising local tax incentives available in each relevant jurisdiction. In
addition, the Company will seek to achieve repatriation of profits through tax efficient holding
company structures. The Directors do not currently anticipate that the Company itself will borrow
any funds.
Founding Shareholders
The Company was capitalised with A5 million in the summer of 2005 by institutional and private
investors including the Investment Manager. The lead investor was Fortress, a world-leading investor
in real estate private equity with approximately $15 billion of equity capital currently under
management. Wes Edens, Chairman and co-founder of Fortress, Rob Kauffman, President and cofounder of Fortress, and three other Fortress managing partners invested personally in the Company.
In June 2005, Fortress listed one of its wholly-owned real estate companies, Mapeley Limited, on the
London Stock Exchange, and Mapeley Limited thereby became one of the largest real estate
companies quoted in the UK with a market capitalisation of approximately 575 million. While at
Soros Real Estate Partners, Miltos Kambourides, the founder and managing partner of the
Investment Manager, was the deal leader in relation to the establishment of Mapeley Limited, which
was a co-investment between Soros Real Estate Partners and Fortress until early 2005 when Fortress
acquired full ownership of Mapeley Limited. Miltos Kambourides was the financial architect of the
two major real estate outsourcing deals that Mapeley Limited currently has under management.
Founding Shareholder Warrants
The Founding Shareholders provided the initial equity capital necessary to establish the Company and
to fund the cost of negotiating and advancing a number of investment opportunities including the
Prospective Investment Portfolio. The Directors believe that the aggregate market value of the
Companys interests in the Prospective Investment Portfolio at acquisition will be significantly greater
than the Companys cost of investment. In recognition of the fact that new Shareholders will be
investing in the Company at the same price per Common Share as the Founding Shareholders, the
Company has issued the Founding Shareholder Warrants. The Investment Manager owns 20 per cent.
of the Founding Shareholder Warrants.
The Founding Shareholder Warrants entitle the Founding Shareholders to subscribe, at par value per
Common Share of A0.01, for such number of Common Shares (capped at 12.5 million Common
Shares) which when multiplied by the Placing Price of 68p (A1.00) equals 50 per cent. of the
difference between the market value of the Companys legal interests in the Prospective Investment
Portfolio and its cost of investment. The valuation of the Companys legal interests in the Prospective
Investment Portfolio will be carried out by the Companys Property Valuer as at 30 June 2006 and
20

this valuation will then be approved by the Board. All of the Founding Shareholder Warrants must
be exercised within 30 days of the valuation or will otherwise lapse.
Founding Shareholder Lock-in Agreements
The Founding Shareholders have also entered into lock-in agreements in relation to their Common
Shares which prevent them from disposing of such shares until the date on which the Founding
Shareholder Warrants lapse. Further details of these lock-in agreements are set out in paragraph 6.2
of Part 11 this document.

21

PART 3
DIRECTORS, INVESTMENT MANAGER AND ADMINISTRATION
Directors of the Company
The Directors of the Company, all of whom are non-executive, will be responsible for the overall
investment activities of the Company.
The Directors are:
Andreas Papageorghiou (Non-executive Chairman), aged 72, a practising lawyer and the Managing
Partner of A. N. Papageorghiou & Associates Law Offices in Nicosia, Cyprus. Mr. Papageorghiou
was called to the English Bar in 1959 (Grays Inn) and he subsequently practiced law from 1959 to
1963. From 1963 to 1978, Mr. Papageorghiou was internal legal adviser and subsequently senior
manager of Legal & Trustee Services of the Bank of Cyprus group of companies. From 1978 to 1980,
he was the Minister of Commerce & Industry of the Republic of Cyprus and from 1981 to 1993, he
was the general manager of the Cyprus Housing Finance Corporation.
Nicholas Moy (Non-executive Director), aged 66, the Group Chairman of Gryphon Emerging Markets
Ltd (Gryphon), an investment banking firm specializing in the countries of the Mediterranean basin
and the Middle East. Gryphon is active in restructuring and refinancing companies requiring capital,
as well as establishing and operating private equity investment funds in the larger emerging market
economies. Mr. Moy currently serves as chairman of the Arab Business Council in London, and is
also a director or advisory board member of a number of international funds and related companies.
Mr. Moy was previously co-founder and Deputy Chairman of Granville Holdings Limited, a London
based investment bank and one of the pioneers of the private equity sector in the UK, Continental
Europe and the Middle East. Mr. Moy has an MA in Oriental Languages and Law from St.
Catharines College, Cambridge University, and an MBA in international finance from the Wharton
School of Finance, University of Pennsylvania. He is a member of the Arab Bankers Association, the
Middle East Association and an alumnus of the Middle East Centre for Arabic Studies.
Cem Duna (Non-executive Director), aged 58, the president of AB Consultancy and Investment
Services, a leading Turkish consultancy company providing strategic business development services to
both Turkish and international corporations and entrepreneurs. He is also the Vice Chairman of the
board of Turkish Industrialists and Businessmen Association. Mr. Duna was previously Ambassador
and Permanent Delegate of Turkey to the European Union between 1991 and 1995. During this
period, he led the negotiations for the formation of the Customs Union. Mr. Duna was also the
Ambassador and Permanent Delegate of Turkey to the United Nations Offices in Geneva and the
Chief Negotiator in the GATT Uruguay Round Multilateral trade negotiations. He also served as the
Director General of Turkish Radio and Television during the years 1988 and 1989. He spent three
and half years as the late President Turgut Ozals Foreign Policy Advisor between the years 1985 and
1988 when Mr. Ozal was the Prime Minister of Turkey. Mr. Duna served at various diplomatic levels
in capitals that included Copenhagen, The Hague, Jeddah and London through his career in the
Foreign Ministry. He is a graduate of the Political Sciences Faculty of the University of Ankara and
has an MA in The Theory of Economic Integration (the European Union) from the University of
Amsterdam. As a public figure in Turkey, Mr. Duna is also an independent lecturer at universities
and participates in conferences and media debates as a guest speaker both in Turkey and abroad.
Antonios Achilleoudis (Non-executive Director), aged 36, the co-founder and Managing Director of
Axia Ventures Ltd and Axia Asset Management, a New York based alternative investment advisory
firm. In this capacity, Mr. Achilleoudis has advised and consulted on the structuring of several hedge
fund and alternative investment products and projects, including the formation of a multi-strategy
hedge fund and the management of a long/short equity fund. He has been instrumental in assisting
several institutions and family offices, in the formation and implementation of alternative investment
strategies. From 1993 to 2000, Mr. Achilleoudis was Vice President of Investments at the Private
Client Group of Gruntal & Co. LLC, an investment bank and member of the New York Stock
Exchange. In this capacity, he was managing the investment portfolios of high net worth individuals
and institutions with specialization in hedge fund advisory services and research. Mr. Achilleoudis is a
graduate of New York University Stern School of Business with a Bachelors Degree in Accounting
and International Finance.
Miltos Kambourides (Non-Independent Director), aged 33, the founder and managing partner of
Dolphin Capital Partners Limited. Information regarding Mr. Kambourides is set out below.
22

Directors of the Investment Manager

The Companys assets will be managed by Dolphin Capital Partners Limited. The senior investment
professionals of the Investment Manager are Miltos Kambourides and Pierre Charalambides (who are
the ultimate beneficial owners of the Investment Manager) and Pedro Miranda and Constantinos
Hassabis. They together possess a combination of in-depth local knowledge and contacts with
extensive real estate investment skills gained at some of the most reputable financial institutions in the
world, such as Soros Real Estate Partners, Goldman Sachs, JPMorgan, Citibank, CSFB and GE
Capital. The Investment Managers four senior investment professionals have collectively over 40
years of relevant investment experience, hold several academic qualifications including six degrees
from Massachusetts Institute of Technology (MIT) and three MBAs, and speak six languages.
Miltos Kambourides Managing Partner, aged 33, is the founder and managing partner of the
Investment Manager. Mr. Kambourides was previously a founding member and is now a retired
partner of Soros Real Estate Partners (SREP), recently renamed Grove International Partners.
SREP was a global real estate private equity business formed in 1999 by George Soros and Richard
Georgi, investing on behalf of Soros Real Estate Investors C.V., a $1 billion real estate private equity
fund that targeted Europe and Japan. During Mr. Kambourides tenure, SREP executed total
investments of approximately $500 million of equity in complex real estate transactions in Western
Europe and Japan, including a significant investment in several master-planned residential
developments in Spain through its real estate investment vehicle named MedGroup Inversiones S.L.
(MedGroup). Through MedGroup, SREP has been one of the biggest foreign investors in Spain in
the master-planned leisure-integrated residential sector achieving returns above the minimum returns
currently targeted by the Company.
While at SREP Mr. Kambourides was primarily responsible for investments relating to property
outsourcing in the UK and for the SREP investment strategy in Southeast Europe. He was the deal
leader and a founder of Mapeley Limited which became the second largest real estate outsourcing
company in the UK after winning two major 20-year multi-billion pound contracts: one with the
Inland Revenue and Custom & Excise Departments of the UK and one with Abbey National plc.
Mr. Kambourides was the financial architect of both these transactions. Following that,
Mr. Kambourides researched the Southeast European markets in depth and developed a broad
network of relationships with developers, operators and other key real estate professionals.
Prior to joining Soros, Mr. Kambourides spent two years at Goldman Sachs in the Real Estate
Principal Investment Area in Europe working on real estate private equity transactions in the UK,
France and Spain. In 1998 he received a Goldman Sachs Global Innovation award for his work on
the first real estate outsourcing contract in the UK which led to the creation of Trillium, the largest
real estate outsourcing company in the UK.
Mr. Kambourides graduated from MIT where he received a B.S. and M.S. in Mechanical Engineering
and a B.S. in Mathematics. He has received several academic honours and participated twice in the
International Mathematical Olympiad (Beijing 1990, Moscow 1992) and once in the Balkan Math
Olympiad (Sofia 1990) where he received a bronze medal.
Pierre Charalambides Partner, aged 34, is the co-founder and partner of the Investment Manager.
Prior to that, Mr. Charalambides worked with Miltos Kambourides as acquisitions director in a
SREP initiative to identify and pursue investment opportunities in Southeast Europe.
From 1999 to 2003, Mr. Charalambides was a senior mergers and acquisitions associate at JPMorgan
where he advised some of Europes leading corporations and entrepreneurs on financial transactions
such as acquisitions, disposals, mergers, private placements, restructurings and leveraged buy-outs
totalling over $6 billion across numerous industry sectors including real estate, retail, construction,
telecoms, media and technology.
Prior to joining JPMorgan, from 1995 to 1998, Mr. Charalambides had been a founding member of
(i) Hilton Internationals corporate development team where for two years he managed the origination
and execution of over $150 million of new Hilton International hotel development projects (luxury
resort, city centre, distressed and mid-market hotel properties) in Canada, the Caribbean, France,
India and Scandinavia; (ii) Insignia Hotel Partners in Europe, now one of Europes leading hotel
investment advisory companies; and (iii) The Hotel Investment Forum in Berlin, one of Europes
most successful annual hotel investment conferences.
Mr. Charalambides holds an MBA from INSEAD and two B.S. from the Management School of
The Hague where he graduated first in his year.
Pedro Miranda Director, aged 33, was from 2002 to 2005 a Vice-President at Edison Advisors, an
affiliate of GE Capital, where he advised buy-side clients looking to invest new equity in companies
struggling with highly leveraged capital structures and/or undergoing bankruptcy restructuring, in a
23

variety of sectors such as real estate, transportation, forest products, manufacturing, food & beverage
and shipyard services. He also advised on disposals and recapitalizations of distressed companies that
were part of the $7 billion GE Capital Funding loan portfolio. Previously, Mr. Miranda worked in
London as an investment banking associate at Credit Suisse First Boston in the mergers and
acquisitions group. From 1996 to 1999, Mr. Miranda worked at Citibank International where he was
involved in several business expansion initiatives for Citibanks Global Consumer Bank in Argentina,
Brazil, Chile, Mexico and Venezuela. Mr. Miranda holds an MBA in Finance from MITs Sloan
School of Management and a B.S. degree in Computer Engineering and Computer Science from the
University of Miami.
Constantinos Hassabis Director, aged 38, has since 2000 been the general manager of J&P
Development, the development subsidiary of J&P Avax, one of the leading construction companies in
Southeast Europe and the Middle East. During those years, he led and established J&P Development
into a pre-eminent real estate development company in the Region and led and negotiated numerous
successful commercial and residential real estate projects ranging in value from A20 million to A350
million. From 1992 to 2000 and prior to founding J&P Development, Mr. Hassabis was the general
manager of 3D Development (another division of J&P Avax) where he was responsible for the
financing and development of project concepts. During these years, he was also in charge of a holiday
home development on the island of Spetses, Greece, which was voted among the three best residential
projects in the world at MIPIM (Cannes Annual Real Estate Exhibition) in 1997. Mr. Hassabis holds
an MBA from MITs Sloan School of Management and a B.S. in Economics from MIT where he
received Phi Beta Kappa and Sigma Xi in recognition of academic achievements and research
aptitude.
The Investment Manager may look to recruit additional professionals after Admission.
Investment Management Agreement
Dolphin Capital Partners provides fund management and advisory services to the Company. Its roles
under the Investment Management Agreement include, in line with guidelines established by the
Board, the following:
*
analysing market, economic and political conditions and developments in Southeast Europe;
*
maintaining government relations and undertaking such lobbying in Turkey, Cyprus, Greece and
Croatia as may be required;
*
sourcing of investment opportunities;
*
evaluating and valuing of investment opportunities;
*
deal structuring and negotiation of each investment;
*
presenting investment opportunities to the Board for approval;
*
co-ordinating professional advisers;
*
taking board positions in investee companies, monitoring such investments and supporting
investee companies as required;
*
seeking and realising exit strategies for investments;
*
co-ordinating collection of financial returns due to the Company such as dividends or any
proceeds received from invested assets and loans to creditors;
*
recommending the level of dividend distributions to the Board;
*
co-ordinating the preparation of accounts and the calculation of the Net Asset Value for
approval by the Board; and
*
providing quarterly reports to Shareholders on the Net Asset Value and the progress of
individual investments.
The Investment Management Agreement is for a fixed term of ten years commencing on 1 August
2005. It may be extended beyond such term with the agreement of the Investment Manager and the
Company. The Investment Management Agreement is also capable of summary termination in certain
circumstances, including material breach of the terms of the agreement or the occurrence of an
insolvency event in respect of the Investment Manager. Further details of the Investment Management
Agreement are set out in paragraph 6.6 of Part 11 of this document.
Under the terms of the Investment Management Agreement the Investment Manager
devote its time and attention to the affairs of the Company and not to manage other
competitive with the Company until such time as 90 per cent. of the Companys funds
to Projects. After that time the Investment Manager will be free to manage funds
competitive with that of the Company.
24

is required to
funds that are
are committed
that might be

Investment Management Fees

The Investment Manager will receive an annual management fee payable quarterly in advance of 2 per
cent. per annum of the total funds raised by the Company, being initially the gross proceeds of the
Placing and the A5 million subscribed by the Founding Shareholders, and subsequently including the
proceeds of any further fund raisings. The Investment Manager will also be paid a performance fee
equal to 20 per cent. of the net realised cash profits received by the Company from each Project after
achieving a hurdle of 8 per cent. annual compounded return (the Hurdle) and deducting a sum
equal to any realised losses and/or writedowns in respect of any other investments, (together the
Relevant Investment Amount). The performance fee payment is subject to escrow and clawback
provisions described below.
Escrow
Half of any performance fee payable to the Investment Manager shall be placed in an escrow account
operated by the Administrator (the Escrow Account) until the date on which the cumulative
distributions made by the Company to its Shareholders first equals or exceeds the total funds raised
by the Company as at Admission (being the gross proceeds of the Placing and the A5 million
subscribed by the Founding Shareholders) (the Distributions Equalisation Date). On the
Distributions Equalisation Date, 50 per cent. of any escrowed funds will be released to the Investment
Manager (meaning that in aggregate the Investment Manager will have received 75 per cent. of the
performance fees payable). Upon the Company making cumulative distributions equal to the total
funds raised by the Company plus the Hurdle, any remaining funds in the Escrow Account will also
be released to the Investment Manager.
Clawback
If on the earlier of (i) disposal of the Companys interest in a relevant investment or (ii) 1 August
2015, the proceeds realised from that investment are less than the Relevant Investment Amount, the
Investment Manager shall pay to the Company an amount equivalent to the difference between the
proceeds realised and the Relevant Investment Amount. The payment of the clawback is subject to
the maximum amount payable by the Investment Manager not exceeding the aggregate performance
fees (net of tax) previously received by the Investment Manager in relation to other investments.
All relevant expenses incurred by the Investment Manager in connection with the sourcing,
negotiation and implementation of Projects shall also be reimbursed by the Company.
The Administrator
Anglo Irish Fund Services Limited has been appointed by the Company to act as administrator to
the Company with effect from, and conditional upon Admission under the terms of the
Administration Agreement. The Administrator is wholly owned by Anglo Irish Bank Corporation plc.
The Administrator is responsible for providing administrative services required in connection with the
Companys operations, including assistance in the preparation of annual and interim financial
statements for the Company and calculation and publication of the Companys Net Asset Value.
Further details of the Administration Agreement are set out in paragraph 6.7 of Part 11 of this
document.
The Custodian
Anglo Irish Bank (I.O.M.) P.L.C. has been appointed by the Company to act as custodian with effect
from, and conditional upon, Admission under the terms of the Custodian Agreement. The Custodian
is wholly owned by Anglo Irish Bank Corporation plc and has been appointed as the Companys
custodian and banker. The Custodian is responsible for providing custodial and banking services to
the Company. Real-estate interests may be held either directly by the Company or through special
purpose vehicles and will not form a part of the assets for which the Custodian is responsible under
the terms of the Custodian Agreement. Further details of the Custodian Agreement are set out in
paragraph 6.8 of Part 11 of this document.

25

PART 4
PROSPECTIVE INVESTMENT PORTFOLIO AND ADDITIONAL INVESTMENT
OPPORTUNITIES
Location
The location of the Projects is one of the key factors in the selection criteria set by the Company. As
seen in the map below, both the Prospective Investment Portfolio and the additional investment
opportunities are positioned in strategic locations in Southeast Europe.

Prospective Investment Portfolio

As at the date of this document, the Company has directly or indirectly through the Investment
Manager or its subsidiaries, agreed terms and is in the process of completing contractual
arrangements in respect of six investments which together comprise the Prospective Investment
Portfolio. If completed, these Projects would require a minimum aggregate capital commitment of
approximately A66 million. The Company expects to fund these investments from the net proceeds of
the Placing. The completion of each investment depends not only upon the completion of the Placing
but also, among other things, upon satisfactory completion of due diligence into each of the
prospective Project companies and land sites and the execution and delivery of final binding
agreements in a form mutually satisfactory to the parties. There can be no guarantee that the
Company will complete all or any of the investments.

Approximate
number of
hectares

Estimated
min. no. of
residential
units

GREECE
Amanmila
Kilada Hills
Kyparissia Bay
Scorpio Bay

140
100
30
172

30
200
100
300

CYPRUS
Artemis Hills
Apollo Heights

120
492
1,054

Project

Total
*

Estimated
Company
investment
(Am)

Expected
Company
shareholding
%

Expected to
be fully
funded within
(months)

5
14*
10
9

33.3
80.0
100.0
50.0

12
6
6
12

300
1,000

9
19

25.0
68.1

6
18

1,930

66

An additional A9 million may be required if a further option is exercised to acquire adjacent land and expand the Kilada Hills
Project.

26

1.
Project Amanmila, Milos, Greece
Project Amanmila involves the development of Europes first villa-integrated Aman Resort, over 1.4
million square metres of land on the island of Milos (Cyclades), Greece. The Investment Manager
believes that Project Amanmila has the potential to become the most exclusive integrated residential
resort in the Mediterranean region.
Project Amanmila comprises two phases. The first phase includes the development of a 40-room
luxury Aman hotel and spa surrounded by 30 Aman villas. The second phase includes the
development of other residential complexes on other portions of the site. Aman Resorts and its
affiliates will be responsible for the design, management, branding and sales.
Project Amanmila is located 15 minutes driving distance from Milos Airport on an unspoilt
peninsula with approximately 2 kilometres of shoreline and its own natural harbour.
Under a shareholders agreement signed on 31 October 2005, Project Amanmila is owned by three
shareholders including the Company, each holding one third of its shares. The other two shareholders
are companies wholly-owned by:
*

Aman Resorts: one of the most exclusive hotel and villa-integrated resort operators in the
world; and

The Heah family: represented by John Heah, Project Amanmilas appointed architect. Amongst
Heahs work is the Four Seasons Hotel in Bali, voted as the Best Hotel in the World by Travel
& Leisure magazine on 15 July 2005.

Each shareholder of Project Amanmila has committed to invest at least A3 million to fund the
acquisition of the land and part of the construction. Project Amanmila is in negotiations to enter into
a notarial pre-contract (binding on the sellers side) to acquire the site.
The planning application process for Project Amanmila has already begun and is expected to take
approximately 18 months.
2.
Project Kilada Hills, Peloponnesus, Greece
Project Kilada Hills involves the development of a Residential Resort with approximately 200 upscale
residential units totalling a minimum of 30,000 buildable square metres, integrated with a private
residence club and a championship standard golf course on approximately 1.0 million square metres
of land. Other leisure facilities would include a club house, a golf academy, a spa and other
supporting retail and sports facilities.
Project Kilada Hills is located two hours driving distance from Athens in the area of Porto Heli,
which is one of the most upscale second home residential areas in Greece. It is less than one kilometre
away from a beach and a small fishing village. The current developer of Project Kilada Hills has
already signed notarial pre-contracts to acquire the site, which consists of 724,000 square metres of
freehold land and 282,000 square metres of leasehold land (to be used for the golf course). The
planning application process for Project Kilada Hills is already at an advanced stage and all planning
approvals are expected to be in place by the beginning of 2006.
The Investment Manager on behalf of the Company has entered into a term sheet with the current
developer which grants the Investment Manager exclusivity until the 23 November 2005 (this period
has been extended unilaterally by the Investment Manager for a period of 10 working days) to
negotiate an investment and shareholders agreement and to fund the acquisition of the site by
subscribing for an 80 per cent. shareholding in Project Kilada Hills with a total equity commitment
of at least A14 million. An additional amount of A9 million may be required from the Company if it
exercises its option to acquire adjacent land and expand the Kilada Hills Project.
3.
Project Kyparissia Bay, Peloponnesus, Greece
Project Kyparissia Bay is a strategic land acquisition with the capacity to develop up to 120 beach
front villas totalling approximately 18,000 buildable square metres. The site comprises 309,000 square
metres of land. The Investment Manager further intends to increase the scale of Project Kyparissia
Bay by expanding the site through additional acquisitions.
The Kyparissia Bay site is located two and a half hours driving distance from Athens and is fronted
by approximately 3 kilometres of unspoilt sandy beach to its western border and 3 kilometres of pine
forest to its eastern border.
The Company (through its subsidiary DolphinCI Two Ltd.) has entered into a notarial pre-contract
(binding on the sellers side until 16 January 2006) to acquire the company owning the site for A5
million subject to completing satisfactory due diligence. A further amount of A5 million will be
27

committed to fund the development process. Completion of the site acquisition in respect of Project
Kyparissia Bay is expected to take place in January 2006.
4.
Project Scorpio Bay, Attica, Greece
Project Scorpio Bay represents the development of a Residential Resort over approximately 1.72
million square metres of contiguous land in the region of Skroponeri, Greece with more than 300
upscale residential units integrated with a private marina. Other leisure facilities include a country
club, a beach club and other supporting facilities. It is further anticipated to develop a championship
standard golf course on adjacent leased land.
The site represents a mountainous peninsula of unspoilt natural beauty surrounded by a forest and
the sea and 1 hours drive from Athens International Airport. The sites location is adjacent to an
area where many members of the Greek parliament have their holiday residences.
The current majority owners of the site represent one of Greeces most influential shipping families
and have already initiated the permitting process. The Investment Manager on behalf of the
Company has entered into a term sheet with a representative of the owners of the Project Scorpio
Bay site with exclusivity until 28 February 2006, to take a 50 per cent. shareholding in Project
Scorpio Bay by contributing A9 million to finance the permit application process and the initial
phases of the development.
5.
Project Artemis Hills, Paphos, Cyprus
Project Artemis Hills represents the development of a Residential Resort with approximately 310
residential villas totalling 67,000 buildable square metres and an 18-hole championship standard golf
course spread over 1.2 million square metres of land. Additional leisure facilities will include a golf
club house, a village square with retail units, swimming pools, and tennis courts.
Project Artemis Hills is situated at driving distances of 15 kilometres from Paphos (Cyprus), 5
kilometres from the beach, 4 kilometres north of Paphos International Airport and 20 kilometres
away from the current Aphrodite Hills site, a similar project which has to date enjoyed strong
demand and is achieving residential sales prices above A4,000 per square metre.
One of the current shareholders of Project Artemis Hills is CCA Group, one of the worlds leaders in
golf integrated communities including Brocket Hall. It has been agreed that CCA will manage the
golf operations and operate the resort under a long-term management agreement. The appointed
master-planner for Project Artemis Hills is Sasaki Associates, one of the worlds leading masterplanners. The golf course will be designed and branded by Nick Faldo, a well-recognised name in the
industry and the golf academy will be run by PGA qualified professionals.
Final zoning and planning consents have recently been obtained and construction is expected to begin
in the first quarter of 2006. The Investment Manager on behalf of the Company signed a term sheet
on 7 February 2005 and is currently in advanced negotiations to acquire up to 25 per cent. of the
shares in Project Artemis Hills from existing shareholders for a consideration of up to A9.4 million.
6.
Project Apollo Heights, Limassol, Cyprus
Project Apollo Heights represents the development of a Residential Resort with over 1,000 residential
villas, integrated with polo fields and potentially a golf course. Other leisure facilities will include a
polo club house and academy, equestrian centre and other supporting facilities.
The proposed site is spread over 4.9 million square metres of unspoilt land covered with natural
herbs and pine trees. It has a stream running through it and is adjacent to the sea with numerous
hills offering panoramic mountain and sea views. The site is situated close to both the towns of
Limassol and Paphos, 30 kilometres from Paphos International Airport and 50 kilometres from
Larnaca International Airport.
The Investment Manager on behalf of the Company has entered into a term sheet with the managers
of Project Apollo Heights, with exclusivity until 25 December 2005, to acquire (subject to the Project
company successfully completing its advanced negotiations to acquire the site) an interest of up to
68.1 per cent. in the Project by committing approximately A19 million to be funded subject to permit
progress.
Additional Investment Opportunities
In addition to the Prospective Investment Portfolio, the Founding Partners of the Investment
Manager have over the past two years developed strategic relationships with some of the leading
developers in the Region and have advanced a number of additional investment opportunities that
28

meet the Companys investment strategy and have the potential to be executed within the next 12
months.
In Cyprus, the Investment Manager has entered into a non-binding agreement with Lanitis
Development, Cypruss leading residential resort real estate developer to jointly develop Residential
Resorts in Cyprus and Greece. Lanitis Development was the creator of Aphrodite Hills
(www.aphroditehills.com) in Cyprus, Southeast Europes best and only completed Master-planned
Leisure-integrated Residential Resort. The development started golf course operations on 1 October
2002 and to date has sold over 500 villas and 250 apartments and experienced great success with
current average selling prices at A4,300 per square metre and with the maximum around A6,000 per
square metre.
The Company is considering investing in two new Projects to be developed by Lanitis Development
that meet the Companys investment strategy and that are expected to be launched in early 2006.
In Turkey, the Investment Manager has established a strategic partnership with Kemer Group,
Turkeys leading residential resort developer, to jointly develop Residential Resorts in Istanbul and
South-Western Turkey. Kemer Group is the owner of Kemer Country in Istanbul, one of Europes
best primary-home communities integrated with a golf and country club. Over the past decade,
Kemer Group has developed and completed 17 residential development projects comprising in excess
of 1,150 individual homes in the Kemerburgaz area of Istanbul, generating approximately $500
million in sales and establishing Kemer Country as one of Istanbuls most prestigious residential
areas. In addition, Kemer Group has invested over $40 million to develop and operate Kemer Golf &
Country Club, Turkeys most prestigious golf and country club operation.
The Company has already identified a number of potential Projects in Turkey that meet the
Companys investment policy and that could be launched in partnership with Kemer Group within
2006.
On a regional Southeast European basis and for luxury Residential Resort developments, the
Investment Manager has developed a strong relationship with Aman Resorts, one of the worlds most
exclusive hotel and villa integrated resort operators. The Company will invest in Project Amanmila,
the first Aman Residential Resort to be launched in Southeast Europe, as described above. As the
Directors believe that Southeast Europe can successfully support a number of additional Aman
Resort Projects, the Company will consider (subject to each Project meeting the Companys
investment strategy) investing in additional such Projects to be launched in the Region in the next 1
to 3 years.
In addition to Projects deriving from the above relationships, the Investment Manager has progressed
a number of other Projects in each of the targeted markets, Cyprus, Greece, Turkey and Croatia that
the Directors and Investment Manager believe could be successfully launched in the next 12 months.
Some of the additional investment opportunities currently under negotiation are briefly summarised
below.

29

The Company has no legally binding contracts in relation to any of these Projects and it does not
expect to reach a binding agreement in relation to more than 50 per cent. of these additional
investment opportunities.

Project

Estimated
Company
investment
(Em)

Brief Project description

GREECE
Project A

10

Residential Resort in Crete on 160 hectares, to include over 60,000

square metres of residential units, an 18-hole championship standard
golf course, country club, hotel and village hub.

Project B

Residential Resort in Olympia on one of the largest beach properties

zoned for development in Greece, to include an 18-hole championship
standard golf course, a world-class spa and a luxury suite-hotel.

Project C

15

Residential Resort over 800 hectares of contiguous land in the region

Sterea Ellada, 90 minutes drive from Athens International Airport, to
include over 1,000 detached private villas and two 18-hole
championship standard golf courses.

CYPRUS
Project D

11

Residential Resort with approximately 515 residential units and an 18hole PGA championship standard golf course over 140 hectares of
land 14 kilometres west of Larnaca International Airport.

Project E

10

Residential Resort with golf to be developed by Lanitis Development,

adjacent to Aphrodite Hills and leveraging existing leisure facilities.

Project F

15

Residential Resort with golf to be developed by Lanitis Development

on existing seafront land owned by Lanitis Group of Companies.

Project G

15

Residential Resort with golf to be developed in partnership with a

leading Cyprus industrial and trading group on 300 hectares of
beachfront land to include over 500 residential units.

TURKEY
Project H

Residential Resort in Gocek, in partnership with Kemer Group aiming

to replicate the success of Kemer Country in Istanbul.

Project I

15

Residential Resort community, master-minded by one of Turkeys

leading architects, near Bodrum on site with 1,750 metres of coastline.

CROATIA
Project J

15

Residential Resort to be developed with leading operator on unspoilt

island by the Dalmatian coast, to include a marina and a five-star 80
room hotel.

Project K

Residential Resort in partnership with a leading operator on

Dalmatian coast. Permits for resort development in place.

Total

127

If all these Projects were completed, an additional capital commitment of approximately A127 million
would be required from the Company, subject to funds being available. When combined with the
Prospective Investment Portfolio, the Directors believe that they further underline the Companys
strong investment potential in the Residential Resort sector in the Region.

30

PART 5
OTHER INFORMATION
Expenses
Expenses of the Placing and Admission
The Company will be incurring costs in connection with the Placing and the application for
Admission. These expenses will be met by the Company and will be paid on or around the date of
Admission. Such expenses will include fees payable under the Placing, registrars fees, depositarys
fees, admission fees, printing costs, legal, advisory and accounting fees and any other applicable
expenses. The Directors do not anticipate that these expenses will exceed 4.0 per cent. of the gross
proceeds of the Placing.
Ongoing Operating Expenses
In addition to costs relating to investments, the Company will incur ongoing operating expenses.
These expenses will include, among others, the fees payable to the Investment Manager, the
Administrator, the Custodian, and the Non-executive Directors (each Non-executive Director,
excluding Miltos Kambourides and Antonios Achilleoudis who are waiving any fees, will initially be
paid a fee of A15,000 per annum). Other ongoing operational expenses of the Company will be borne
by the Company including, among others, bank fees, regulatory fees, legal fees, insurance costs, audit
fees and other expenses. It is estimated that the total expenses of the Company for the year ending
31 December 2006 will not exceed A2,850,000.
Shareholder Information
The Companys annual report and accounts will be prepared up to 31 December each year after 2005
with the first accounting period of the Company ending on 31 December 2006, and it is expected that
copies of the report and accounts will be sent to Shareholders within six months of the year end date.
In addition, the first unaudited interim report of the Company will be prepared up to 30 June 2006
and is expected to be despatched on or before 31 August 2006. After 2006, Shareholders will receive
an unaudited interim report covering the six months to 30 June each year, which is expected to be
despatched within three months of that date each year.
Under BVI law the Company is not required to hold an annual general meeting in any year.
However, it is the current intention of the Directors that, at the time of the publication of the
Companys annual report and accounts, Shareholders will be notified of a venue and time at which
the Investment Manager will give a presentation to Shareholders concerning the Companys
investment portfolio.
Valuation Reporting and Policy
The first Net Asset Value per Common Share will be calculated as at 30 June 2006. The Companys
Net Asset Value will be published through a regulatory information service provider to the London
Stock Exchange as soon as practicable after 30 June 2006 and at the end of each subsequent quarter.
The Company will also disclose the sterling equivalent of the reported Net Asset Value per Common
Share based on the prevailing exchange rate.
The Net Asset Value and the Net Asset Value per Common Share shall be calculated (and rounded
to two decimal places), in Euros by the Administrator on a quarterly basis (or at such other times as
the Investment Manager may determine but in any event not less than quarterly).
The Net Asset Value shall be the value of all assets of the Company less the liabilities of the
Company determined in accordance with the valuation guidelines adopted by the Directors from time
to time. Under current valuation guidelines adopted by the Directors, such values shall be determined
as follows:
*

the value of investments made by the Company, whereby the future cashflows to be derived
from these investments can be reasonably estimated, will be based on the net present value of
the expected future cash flows discounted using an appropriate market discount rate. The
Property Valuer, currently Colliers International S.A., will determine the appropriate discount
rate on a case by case basis;

the value of the investments made by the Company whereby the future cashflows to be derived
from these investments cannot be reasonably estimated will be based on the market value of the
land owned by the Project company less any liabilities it may have;
31

the value of any cash in hand or on deposit, bills and demand notes and accounts receivable,
prepaid expenses, cash dividends and interest declared or accrued as aforesaid and not yet
received shall be deemed to be the full amount thereof, unless in any case the Directors shall
have determined that the same is unlikely to be paid or received in full, in which case the value
thereof shall be arrived at after making such discount as the Directors may consider appropriate
in such case to reflect the true value thereof;

any other assets and liabilities shall be valued at their respective fair values as determined in
good faith by the Directors and in accordance with generally accepted valuation principles and
procedures; and

any value other than in Euros shall be translated at any officially set exchange rate or
appropriate spot market rate as the Directors deem appropriate in the circumstances having
regard, inter alia, to any premium or discount which may be relevant and to costs of exchange.

If the Directors consider that any of the above bases of valuation are inappropriate in any particular
case or generally, they may adopt such other valuation or valuation procedure as they consider is
reasonable in the circumstances provided that such other valuation or valuation procedure has been
approved by the Companys auditors. The Directors may delegate to the Investment Manager any of
their discretions under the valuation guidelines.
Life of the Company
The Company does not have a fixed life, however, shortly before the tenth anniversary of Admission
(or earlier if appropriate) the Board will convene a Shareholders meeting at which a resolution will
be proposed to determine the future of the Company.
Currency Issues and Cash Investment
The Directors anticipate that the Companys investments will be made in Euros and that the revenue
on the Project investments (sales proceeds and any other income) will also be in Euros. Accordingly,
the Company will convert the sterling proceeds of the Placing into Euros after Admission as required
by its investment programme. Any dividends or other distributions made to Shareholders will be paid
in Euros. All reporting by the Company in terms of its NAV announcements, interim and audited
accounts will be in Euros. The base currency of the Company for accounting purposes will be Euros.
Any cash held by the Company may be held on deposit or invested in money-market funds or other
near-cash investments. To minimise currency risk, particularly in Croatia and Turkey (where
investments are made in Turkish Lira or Croatian Kuna), the Company may enter into currency
hedging programmes. Cash pending investment, reinvestment or distribution will be placed in Euro or
pound sterling bank deposits, bonds or treasury securities, for the purpose of protecting the capital
value of the Companys cash assets. In order to hedge against interest rate risks or currency risk, the
Company may also enter into forward interest rate agreements, forward currency agreements, interest
rate and bond futures contracts and interest rate swaps and purchase and write (sell) put or call
options on interest rates and put or call options on futures on interest rates. The Company does not
intend to have any significant exposure to margin positions.
Further Issues of Common Shares
The Directors will have authority to allot the authorised but unissued share capital of the Company
following Admission on a non-pre-emptive basis. There is no limit on the number of Common Shares
that the Directors may allot. Such authority shall only be exercised at a subscription price which is
not less than the then prevailing Net Asset Value per Common Share.
Distributions to Shareholders
The Companys intention is to maximise the IRR of each Project investment and therefore it intends
to return capital profits as soon as they are realised. For the first three years following Admission
only, the profits realised from Projects could be made available for reinvestment into further Projects
as determined by the Board (net of any performance fees due).
Distributions may be made by way of dividend or a redemption or repurchase of Common Shares, at
the Directors discretion. Distributions may give rise to a liability to tax on income or capital gains,
depending on a Shareholders individual tax position. To date, the Company has not paid any
dividends.
32

Repurchase of Common Shares

If Common Shares are trading at a discount to Net Asset Value per Common Share (based on the
latest published NAV), the Company may purchase Common Shares for cancellation. The purchase
of Common Shares on this basis may address the imbalance between supply and demand indicated by
the presence of a discount, and would be beneficial to the Net Asset Value per Common Share of the
remaining Common Shares.
The Directors will have the authority to repurchase the Common Shares in issue immediately
following Admission. There is no present intention to exercise such authority. Any repurchase of
Common Shares will be made subject to BVI law and within guidelines established from time to time
by the Board (which will take into account the income and cash flow requirements of the Company)
and the making and timing of any repurchases will be at the absolute discretion of the Board.
Purchases of Common Shares will only be made through the market for cash at prices below the
prevailing Net Asset Value per Common Shares where the Directors believe such purchases will
enhance Shareholder value.

33

PART 6
COUNTRY PROFILES
GREECE
Greece experienced a GDP growth of above 3.5 per cent. in 2004 and the year-on-year increase at the
end of Quarter 3, 2005 was 3.9 per cent. This significantly outperforms the Eurozone average for nine
consecutive years. The Athens 2004 Olympics encouraged the Greek government to significantly invest
in infrastructure (new airport, highways and hotels) and boosted Greeces profile as a leading tourist
destination in the Region.
The Directors and the Investment Manager believe that Greece, being an Euro denominated country
since 2001, has all the prerequisites to become a prime holiday home destination for Northern
Europeans.
Greece is maturing as a key member of the European Union. Year-on-year inflation (EU harmonised)
is currently at 3.9 per cent. (2004: 2.9 per cent.) partly due to tax effects and high international oil
prices. In addition, the trade and fiscal deficits are being addressed through measures to curtail
spending pressures as the Euro Stability and Growth Pact requires.
The national government of Greece is the centre-right New Democracy (ND) elected in March 2004.
Whilst facing certain challenges, notably the trade deficit, the government is progressive in its desire
to introduce market reforms as exemplified through cautious reform policies on privatisation, labour
laws and pensions. The government is also placing the development of golf resorts and other tourism
infrastructure as one of its top priorities in its economic policy.
CYPRUS
Although not a full member of the European Monetary Union, Cyprus has joined the EUs system of
pegged exchange rates requiring the associated fiscal and monetary discipline. GDP growth was 3.2
per cent. in 2004, with inflation (EU harmonised) running at a moderate 2.76 per cent. to the end of
April 2005.
Cyprus entered the European Union on 1 May 2004 and offers one of the most competitive taxation
environments in Europe. The country further benefits from an excellent climate with long seasonality
and is already a very popular second home/retirement destination for British citizens who established
Cyprus as the most vibrant holiday home market in the Region. This market leadership was further
strengthened on 27 May 2005, when a new law was passed paving the way for 11 golf-integrated
residential resorts by allowing such developments on un-zoned land subject to certain criteria. The
Investment Manager has been aware of the prospect of this law since early 2004 and is in discussions
in relation to the majority of these developments.
The current Cypriot government comprises representatives of Progressive Party of the working People
(AKEL), Democratic Party (DIKO) and the Socialist Party of Cyprus (EDEK) and independents.
The Government is planning the reform of public administration but the main area of attention
remains the tensions with Turkey over recognition. It should be noted, however, that Turkey has
recently signed a key protocol extending a customs union to the Republic of Cyprus.
With the recent relative strength of the Euro, the current account deficit could remain an issue but
monetary and fiscal discipline should curtail inflationary pressures. Furthermore, Euro adoption
aspirations are expected to enhance Cyprus business environment and benefit the Companys
investments.

34

TURKEY
Whilst Turkish real GDP growth has slowed in the twelve months to June 2005 it remains at a
healthy 4.2 per cent. Inflation, which has historically been at extremely high levels, has been curtailed
in recent years falling to 8 per cent. in the year to 30 September 2005. In 2004 the country
experienced its highest ever number of tourist arrivals (currently estimated to be in excess of 17
million) and land and property values remain low relative to Greece and Cyprus. Certainly risks
remain, including the size of the current account deficit and the vagaries of investor sentiment but,
the Directors anticipate that tight monetary and fiscal policies and the reform terms of the new IMF
standby agreement will support the investment case for the Company.
The current Turkish government is led by the Justice and Development Party (AKP). European
Union accession negotiations commenced on 3 October 2005 and are expected to be protracted.
Negotiations may be hampered by the Cyprus issue but the current extension of the customs union
agreement offers a tentative rapprochement. The government will need to continue to address the
reforms required by IMF conditions and EU accession requirements.
The Directors believe that the measures taken by Turkey to address its economic and structural issues
to date and its desire to advance swiftly with EU accession negotiations indicate an ongoing process
of reforms that will underpin the Companys activities.
CROATIA
Real GDP growth dropped sharply in the first quarter of 2005 and unemployment remains stubbornly
high. In addition, the current account deficit remains in negative territory. To offset the effects of
slowing economic growth, the IMF agreed in July 2005 to allow the authorities to overshoot its fiscal
deficit target for the current year. The Balkan Wars of the 1990s resulted in the destruction of the
countrys infrastructure and the tourism inflow has only recently returned to the levels of the 1980s.
The current Croatian government is led by the Croatian Democratic Union. The government remains
under pressure from both the EU and the IMF to carry out political and economic reforms, however
local elections in May 2005 passed relatively successfully. Croatias membership negotiations with the
EU requires movement on co-operation with the International Criminal Tribunal for former
Yugoslavia (ICTY).
The Directors believe that the current fiscal and monetary management policies and EU membership
aspirations of Croatia revamped on 3 October 2005 provide the political and economic conditions to
enhance the current investment opportunity for the Company. In addition, the Directors have noted
signs of a growing demand for leisure-integrated real estate along the entire Dalmatian coast, and
particularly for upscale projects near Dubrovnik.

35

Some of the Regions key demographic and macro-economic indicators are summarised in the
following table:

Indicator

Greece

Cyprus

Turkey

Croatia

10.7

0.8

69.7

4.5

131,940

9,250

780,580

56,542

13,676

648

7,200

5,835

GDP (PPP) $ billion (2004 estimate)

226.4

15.7

508.7

50.33

GDP growth (2004 estimate)

3.7%

3.2%

8.2%

3.7%

Inflation (2004 estimate)

2.9%

2.4%

9.3%

2.5%

Unemployment (2003)

10.0%

3.2%

9.3%

13.8%

Government debt (% of GDP 2004 estimate)

101%

75%

74.3%

41.7%

Tourist arrivals 2004 (million)

14.2

2.3

17.5

9.4

Corporate tax rate

32%

10%

30%

20%

Population (millions)
Area (square kilometres)
Coastline (kilometres)

36

PART 7
THE PLACING
Shares Subject to the Placing
The Placing comprises an offer by the Company of the Placing Shares to raise net proceeds of
approximately 67,864,000 (A99,800,000). The Placing is arranged by Panmure Gordon in accordance
with the terms of the Placing Agreements further details of which are set out under Placing
Arrangements below and in paragraph 6.1 of Part 11 of this document.
Placing Arrangements
On 6 December 2005, the Company, the Investment Manager, the Directors, Panmure Gordon and
Grant Thornton Corporate Finance entered into the Placing Agreement pursuant to which Panmure
Gordon agreed, subject to certain conditions, to use reasonable endeavours to procure subscribers for
the Placing Shares which are allocated pursuant to the Placing. All such subscriptions will be at the
Placing Price. For the avoidance of doubt, Panmure Gordon is not itself obliged under the Placing
Agreement to subscribe for any Placing Shares for which it is unable to procure subscribers. Under
the Placing, the Placing Shares have been offered to institutional and certain other investors in the
UK and certain other European jurisdictions. No Placing Shares have been sold or are available in
whole or in part to the public in the UK or elsewhere in connection with the Placing. The Common
Shares have not been and will not be registered under the Securities Act and, subject to certain
exceptions, may not be offered or sold within the United States. The Placing is subject to the
satisfaction of conditions contained in the Placing Agreement, including Admission occurring on or
before 8 December 2005 (or such later date as Panmure Gordon and the Company may agree (not
being later than 16 December 2005)). Certain conditions are not capable of waiver. The Placing
Agreement contains provisions entitling Panmure Gordon to terminate the Placing (and the
arrangements associated with it) at any time prior to Admission in certain circumstances. If this right
is exercised, the Placing will lapse and any monies received in respect of the Placing will be returned
to applicants without interest. The Placing Agreement provides for Panmure Gordon to be paid (inter
alia) commissions in respect of the Placing Shares to be allotted pursuant to the Placing. Any
commissions received by Panmure Gordon in connection with the placing may be retained for its own
benefit. Further details of the terms of the Placing Agreement are set out in paragraph 6.1 of Part 11
of this document.
Lock-in Arrangements
Each of the Companys Directors and all related parties for the purposes of the AIM Rules have
agreed not to dispose of any interest in their Common Shares for a period of one year following
Admission except in certain restricted circumstances. Each of the Founding Shareholders have agreed
not to dispose of any interest in their Common Shares before the date of lapse of the Founding
Shareholder Warrants. Details of these lock-in arrangements are set out in paragraph 6.2 of Part 11
of this document.
Admission, Settlement, Dealings and CREST
Admission of the entire share capital of the Company to trading on AIM is expected to take place
and dealings in the Common Shares are expected to commence at 8.00 a.m. on 8 December 2005.
The earliest date for settlement will be on that date. Dealings on AIM before Admission will only be
settled if Admission takes place. All dealings in Common Shares prior to commencement of
unconditional dealings will be at the sole risk of the parties concerned. The Common Shares will be
issued in registered form. The Registrar will be responsible for the maintenance of the register of
Shareholders.
CREST is a UK computerised paperless share transfer and settlement system, which allows shares
and other securities, including depositary interests, to be held in electronic form rather than in paper
form.
Shares of certain non-UK companies, such as the Company, cannot be held and transferred directly
into the CREST system. Shareholders who wish to hold and transfer Common Shares in
uncertificated form may do so pursuant to a Depository Interest arrangement to be established by the
Company.
The Common Shares will not themselves be admitted to CREST. Instead Computershare will issue
Depository Interests in respect of the Common Shares. The Depository Interests will be independent
securities constituted under English law that may be held and transferred through the CREST system.
37

The Depository Interests will have the same security code (ISIN) as the underlying Common Shares.
The Depository Interests will be created and issued pursuant to a deed poll entered into by
Computershare on 21 November 2005, which will govern the relationship between Computershare and
the holders of the Depository Interests.
Common Shares represented by Depository Interests will be held on bare trust for the holders of the
Depository Interests.
To the fullest extent permitted by BVI Law, each Depository Interest will be treated as one Common
Share for the purposes of determining eligibility for dividends, issues of bonus stock and voting
entitlements. In respect of dividends, the Company will put Computershare (or custodian if
appointed) in funds for the payment and Computershare will transfer the money to the holders of the
Depository Interests. In respect of any bonus stock, the Company will allot any bonus stock to
Computershare and will issue such bonus stock to the holder of the Depository Interest (or as such
holder may have directed) in registered form. In respect of voting, Computershare will cast votes in
respect of the Common Shares as directed by the holders of the Depository Interests which the
relevant Common Shares represent. Application has been made for the Depository Interests in respect
of the underlying Common Shares to be admitted to CREST with effect from Admission.
Further information regarding the depository arrangement and the holding of Common Shares in the
form of Depository Interests is set out in paragraph 10 of Part 11 of this document and is available
from the Depositary. The Depositary may be contacted at Computershare Investor Services Plc, PO
Box 82, The Pavilions, Bridgwater Road, Bristol BS99 7NH, United Kingdom.

38

PART 8
LETTER FROM ECONOMICS RESEARCH ASSOCIATES
Economics Research Associates is one of the worlds oldest and largest leisure and tourism industry
consulting firm. ERA has conducted over 15,000 studies for public and private, sector clients around
the world. ERA is an Anglo-American company with the European headquarters in London, and
offices throughout the US.
During its 45-year history, ERA has acquired an extensive depth of consulting experience in leisure
and tourism within the industry. The firm has been instrumental in the planning, development and
operational phases of many of the most well known recreation, entertainment, cultural, educational
and tourist attractions in the world. ERAs services include market research, economic feasibility
studies, concept development, repositioning and market adjustment strategies, valuations, operational
consulting, expansion planning, economic impact analyses, and marketing programmes.
ERA London has an active integrated resort practice and has worked extensively throughout Europe,
Africa and the Middle East. Studies recently completed by staff based in the London Office of ERA
include a detailed market and financial feasibility for the Aphrodite Hills Resort project in Cyprus for
the Lanitis Group. In Spain, ERA London has over many years advised Soros Real Estate on their
golf and real estate development strategy and assisted in concept development. In Greece and Turkey,
ERA London is working on both golf and non-golf resort concepts and in the Middle East is
working on both urban and coastal resort and real estate concepts. In Scotland, ERA London has
been working on an integrated resort concept on the Banks of Loch Lomond as well as advising The
Gleneagles Hotel on their peripheral land use expansion plans including development concept work
for the proposed Gleneagles Seasonal Ownership product. Resort clients of ERA include Ritz-Carlton,
Serena Hotels, Four Seasons and Aman Resorts.

Economics Research Associates

25 Hosier Lane
London
EC1A 9DW
2 November 2005
The Directors
Dolphin Capital Investors Limited
Vanterpool Plaza
2nd Floor
Wickhams Cay 1
Road Town
Tortola
British Virgin Islands

Dear Sirs
THE INTEGRATED RESORT REAL ESTATE MARKET
The appreciation of property prices in many Northern European markets, but notably in the UK and
Ireland, has created wealth and the desire and ability to purchase a second home across a large
stratum of middle and upper income society. It is largely UK and Irish buyers who have fuelled
demand for second homes throughout the Southern Mediterranean and, increasingly in the Eastern
Mediterranean (Turkey, Greece, Cyprus, and Croatia).
Germany, dogged by a deflated property market has remained a secondary demand source for some
time, but we anticipate revived growth in the medium term. Italian and French buyers have
traditionally not bought property overseas but we have observed recent buyer activity from the Italian
market in Egypt and Costa Rica and from the French market in Morocco and Mauritius indicating
that a modest, price sensitive but pioneering market is emerging.
Spain and Portugal have always been the strongest second home destinations in Europe. According to
research commissioned by the Abbey National (Building Society) over 700,000 British people own
39

properties in Spain and over 50,000 in Portugal. However, our research amongst international agents
indicates a fatigue with both destinations as they are increasingly perceived to be both overcrowded
and expensive. According to The Economist, in 2004 some 180,000 holiday homes were built along
the coast of Spain and a million more are planned for the Costa Blanca alone over the next decade.
As much as one third of Spains coastline is now under concrete.
Core generating markets are now seeking out new destinations where property prices are more
attractive, where there is still an unspoilt coastline and a stronger sense of place, such as in the
Southern European countries.
Cyprus is an interesting case study; pent-up demand for high quality leisure-integrated resorts was
clearly demonstrated when Aphrodite Hills was launched onto the market a few years ago. Sales
velocity of second home products within this integrated golf development was higher than any other
development on the island at premiums in excess of 30 per cent. above non-golf product elsewhere in
Cyprus.
In Croatia, development to date has been largely speculative in nature and characterised by small
parcel development. There are no upscale master-planned communities, but there is strong potential
to develop this market.
In Turkey, poor quality modestly proportioned real estate is selling well to British and Irish buyers.
We believe that integrated resorts offering multiple amenities and a quality environment can develop
the market in Turkey away from middle market speculators towards a more lucrative lifestyle and
investment buyer. Areas of particular opportunity include Antalya, Izmir and Bodrum.
In Greece, restrictive planning frameworks to date have hindered the development of high quality
master-planned communities. There is strong evidence of pent up demand and we are aware of a
number of projects now successfully navigating the bureaucratic hurdles.
ERA see additional potential in other emerging markets such as Montenegro and Bulgaria.
The depth of the market for second homes is difficult to quantify. Alliance & Leicester in their 2004
report on retirement migration calculated that by 2020 over six million Britons alone will venture
overseas to work and live. Such projections are supported by both demographic trends and lifestyle
characteristics.
Recovery in the German economy will help to revitalise a second home market that was once the
driver of real estate sales in key resort destinations. There is also growing potential in other
geographic source markets particularly the growing economies of Central Europe.
The traditional lifestyle-driven purchase of a second home has been supplemented by the desire of
buyers to find investment vehicles beyond faltering stock market and pension fund investments. In
addition, the cash rich/time poor generation wants a property that is low hassle and has strong leisure
elements to it. Thus we see the emergence of investor products such as condo-hotels and seasonal
ownership products such as fractionals, private residential clubs and destinations clubs. These hybrid
real estate products have broadened the market and added greater choice for the buyer and greater
opportunity for the developer.
Yours faithfully
Muriel Muirden
Managing Director

40

PART 9
ACCOUNTANTS REPORT

Grant Thornton UK LLP

Chartered Accountants
UK member of
Grant Thornton International

The Directors
Dolphin Capital Investors Limited
Vanterpool Plaza
2nd Floor
Wickhams Cay 1
Road Town
Tortola
British Virgin Islands
6 December 2005

Dear Sirs
Dolphin Capital Investors Limited (the Company)
Introduction
We report on the financial information set out in paragraphs 1 to 6 of Part 9 of this document. This
financial information has been prepared for inclusion in the AIM admission document dated
6 December 2005 of Dolphin Capital Investors Limited on the basis of the accounting policies set out
in the notes to the financial information. This report is required by paragraph 20.1 of Annex 1 of the
AIM Rules and is given for the purpose of complying with that paragraph and for no other purpose.
Responsibilities
The Directors of Dolphin Capital Investors Limited are responsible for preparing the financial
information on the basis of preparation set out in note 1 to the financial information and in
accordance with the International Financial Reporting Standards (IFRS). Such financial
information is the responsibility of the Directors of the Company who approve its issue.
It is our responsibility to form an opinion on the financial information as to whether the financial
information gives a true and fair view, for the purposes of the AIM admission document, and to
report our opinion to you.

Gatwick Office
The Explorer Building
Fleming Way
Crawley RH10 9GT
T +44 (0) 870 381 7000
F +44 (0) 870 381 7005
www.grant.thornton.co.uk
Grant Thornton UK LLP is a limited
liability partnership registered in England
and Wales: No. OC307742. Registered
office: Grant Thornton House, Melton
Street, Euston Square, London NW1
2EP. A list of members is available from
our registered office.
Grant Thornton UK LLP is authorised and
regulated by the Financial Services
Authority for investment business.

41

Basis of Opinion
We conducted our work in accordance with the Standards for Investment Reporting issued by the
Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence
relevant to the amounts and disclosures in the financial information. It also included an assessment of
the significant estimates and judgements made by those responsible for the preparation of the
financial information and whether the accounting policies are appropriate to the Companys
circumstances, consistently applied and adequately disclosed.
We planned and performed our work so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that
the financial information is free from material misstatement, whether caused by fraud or other
irregularity or error.
Opinion
In our opinion, the financial information set out in paragraphs 1 of 6 of Part 9 of the AIM
admission document gives, for the purposes of the AIM admission document dated 6 December 2005,
a true and fair view of the state of affairs of Dolphin Capital Investors Limited as at 30 September
2005 and of its profits, cash flows and changes in equity for the period then ended in accordance
with the basis of preparation set out in the notes to the financial information and in accordance with
IFRS.
Declaration
For the purposes of Paragraph (a) of Schedule Two of the AIM Rules we are responsible for this
report as part of the AIM admission document and declare that we have taken all reasonable care to
ensure that the information contained in this report is, to the best of our knowledge, in accordance
with the facts and contains no omission likely to affect its import. This declaration may be included
in the AIM admission document dated 6 December 2005 of Dolphin Capital Investors Limited in
compliance with Schedule Two of the AIM Rules.
Yours faithfully

GRANT THORNTON UK LLP

42

UNAUDITED FINANCIAL INFORMATION ON DOLPHIN CAPITAL

INVESTORS LIMITED
1
ACCOUNTING POLICIES
Basis of preparation
The financial information has been prepared in accordance with International Financial Reporting
Standards (IFRS).
The financial information has been prepared on the historical cost basis. The principal accounting
policies adopted are set out below. All amounts have been rounded to the nearest Euro.
Cash and cash equivalents
Cash, for the purpose of the cash flow statement, comprises cash in hand and deposits repayable on
demand.
Financial Instruments
Financial assets are recognised in the balance sheet initially at fair value net of transaction costs and
subsequently at amortised cost. All financial assets fall within the category of loans and receivables.
Provision is made for impairment where appropriate. Income and expenditure arising on financial
instruments is recognised on the accruals basis under the effective interest method and credited or
charged to the profit and loss account in the financial period to which it relates.
Trade receivables are initially stated at fair value. They do not carry any interest and are stated at
their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. Trade
payables are not interest bearing and are initially stated at their nominal value and subsequently
measured at amortised cost less settlement payments.
Foreign currencies
The Companys functional and presentation currency is Euros.
Transactions in currencies other than Euros are recorded at the rates of exchange prevailing on the
dates of the transactions. At the balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.
Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are
translated at the rates prevailing at the date when the fair value is determined. Gains and losses
arising on retranslation are included in net profit or loss for the year, except for exchange differences
arising on non-monetary assets and liabilities where the changes in fair value are recognised directly
in equity.

43

BALANCE SHEET

Note

At
30 September
2005
A

Current assets
Cash

4,924,267

Total assets

4,924,267

Equity and liabilities

Equity
Share capital
Share premium account
Retained earnings deficit

6.6

4,918,061

Total equity
Current liabilities
Trade and other payables

6.5

6,206
6,206

Total current liabilities

4,924,267

Total equity and liabilities

3

50,000
4,950,000
(81,939)

INCOME STATEMENT

Note

Period ended
30 September
2005
A

Administrative expenses
Staff costs

6.2

(88,461)
(5,001)

Loss from operations

Finance income

6.1
6.3

(93,462)
11,523

Loss before tax

Tax

6.4

(81,939)

(81,939)

Loss for the financial period

4

STATEMENT OF CHANGES IN EQUITY

Note

Shares issued in the period

Retained loss for the period

Share capital
A

Share
premium
account
A

50,000

4,950,000

(81,939)

5,000,000
(81,939)

50,000

4,950,000

(81,939)

4,918,061

6.6

At 30 September 2005

44

Retained
earnings
A

Total
A

CASH FLOW STATEMENT

Note

Operating activities
Loss before tax
Adjustments for:
Increase in payables

Period ended
30 September
2005

(81,939)
6,206

Cash expended from operations

Net finance income

(75,733)
(11,523)

Net cash outflow from operating activities

(87,256)

Investing activities
Interest received

11,523

Net cash inflow from investing activities

11,523
(75,733)

Cash outflow before financing

Financing activities
Issue of shares

6.6

5,000,000

Increase in cash and cash equivalents in period

Cash and cash equivalents at start of the period

4,924,267

Cash and cash equivalents at end of the period

4,924,267

6
NOTES TO THE FINANCIAL INFORMATION
6.1 Loss from operations
Dolphin Capital Investments Limited is a company incorporated in the British Virgin Islands under
the International Business Companies Act (Cap. 291) as an International Business Company. The loss
from operations is attributable to the principal activity, that of an investment company.
6.2 Remuneration of directors
The remuneration in respect of the directors was as follows:
Period ended
30 September
2005
A

Directors remuneration

5,001

Staff costs
The average number of persons employed by the Company (including directors) during the period
was three. The aggregate fees paid in respect of services provided by these persons is disclosed above.
6.3

Finance income
Period ended
30 September
2005
A

Bank interest receivable

11,523

45

6.4 Tax
As a company incorporated under the BVI International Business Companies Act (Cap. 291), the
Company is exempt from taxes on profit, income or dividends. Each company is required to pay an
annual government fee which is determined by reference to the amount of the Companys authorised
share capital.
6.5

Trade and other payables

At
30 September
2005
A

Accruals and deferred income

6.6

6,206

Share capital
At
30 September
2005
A

Authorised
Equity: 200,000,000 Common Shares of A0.01 each

2,000,000

Allotted, called up and fully paid

Equity: 5,000,000 Common Shares of A0.01 each

50,000

Share issues
On 7 June 2005, 1 Common Share with nominal value of A0.01 was allotted to the Investment
Manager as the initial subscriber of the Company for A1.
On 15 July 2005, 99 Common Shares of A0.01 each were allotted to the Investment Manager for A1
per Common Share.
On 1 August 2005, 4,999,900 Common Shares of A0.01 each were allotted for A1 per Common Share.
6.7 Post Balance Sheet Events
The following events occurred between 30 September 2005 and the date of the Admission Document.
Subsidiary Undertakings
The following undertakings in which the Companys interest is more than 20 per cent., were
incorporated since 30 September 2005:
Subsidiary undertakings

Country of incorporation

Principal activity

Class and percentage

of shares held

DolphinCI One Ltd.

DolphinCI Two Ltd.
DolphinCI Three Ltd.
DolphinCI Four Ltd.
Dolphin Holdings One Ltd.
Dolphin Holdings Two Ltd.

Cyprus
Cyprus
Cyprus
Cyprus
British Virgin Islands
British Virgin Islands

Dormant shell
Project company
Dormant shell
Dormant shell
Dormant shell
Dormant shell

100
100
100
100
100
100

per
per
per
per
per
per

cent.
cent.
cent.
cent.
cent.
cent.

Ordinary
Ordinary
Ordinary
Ordinary
Common
Common

Warrants
On 6 December 2005 the Founding Shareholder Warrants were issued. The Founding Shareholder
Warrants entitle the Founding Shareholders to subscribe, at nominal value per Common Share of
A0.01, for such number of Common Shares (capped at 12.5 million Common Shares) which when
multiplied by the Placing Price of 68p (A1.00) equals 50 per cent. of the difference between the
market value of the Companys legal interests in the Prospective Investment Portfolio at acquisition
and its cost of investment. The valuation of the Companys legal interests in the Prospective
Investment Portfolio will be carried out by the Property Valuer as at 30 June 2006.
6.8 Accounting period
The accounting period is for the period from incorporation on 7 June 2005 to 30 September 2005.

46

PART 10
TAXATION
The information below, which relates only to United Kingdom and BVI taxation, is applicable to the
Company and to persons who are resident or ordinarily resident in those jurisdictions (except where
indicated) and who hold Common Shares as investments and in the circumstances indicated below to nonresidents carrying on a trade in the United Kingdom. It is based on existing law and practice and is
subject to subsequent changes therein. If you are in any doubt as to your tax position, you should
consult your own professional adviser without delay.
BVI
The Company
As a company incorporated under the IBCA, the Company is exempt from taxes on profit, income or
dividends. The Company is required to pay an annual government fee which is determined by
reference to the amount of the Companys authorised share capital.
Non-BVI Resident Investors
Shareholders are exempt from all BVI income taxes on dividends and other payments received from
the Company provided that the Shareholder is not resident in the BVI. There are no applicable
capital gains taxes, capital transfer taxes, estate duties or inheritance duties in the BVI.
United Kingdom
The Company
The Company intends to conduct its affairs so that, for United Kingdom corporation tax purposes, it
will not be regarded as resident within the United Kingdom nor as carrying on a trade through a
permanent establishment located in the United Kingdom. On that basis and on the assumption that it
has no United Kingdom source income the Company will have no liability in respect of United
Kingdom corporation tax on its income or capital gains.
United Kingdom Resident Investors
Shareholders who are resident in the United Kingdom may be liable to United Kingdom income tax
or corporation tax in respect of dividend income received from the Company and to United Kingdom
capital gains tax or corporation tax on chargeable gains in respect of capital gains realised on a
disposal of Common Shares.
(a) Taxation of dividends
A distribution by the Company with respect to the Common Shares in the form of a dividend may
give rise to income chargeable in the United Kingdom to either income tax or corporation tax on
income. In the case of a dividend, individuals domiciled and ordinarily resident for tax purposes in
the United Kingdom who are liable to income tax at the starting or basic rate will be taxed at the
ordinary rate (10 per cent.) under Schedule D Case V of the Income and Corporation Taxes Act
1988 (the UK Taxes Act). An individual who is a higher rate tax payer will be chargeable to tax at
the upper rate (32.5 per cent.) under Schedule D Case V of the UK Taxes Act. Non-taxpayers will
have no liability to income tax.
United Kingdom resident corporate shareholders will normally be liable for corporation tax on any
dividends paid by the Company.
No withholding tax will be deducted from dividends paid by the Company.
(b) Taxation of capital gains
The Company will not be a collective investment scheme for the purposes of the United Kingdom
offshore funds legislation. Accordingly, any gain realised by a United Kingdom resident holder of
Common Shares or a holder of Common Shares who carries on a trade in the United Kingdom
through a permanent establishment with which their investment in the Company is connected on a
sale or other disposal (including from liquidation or dissolution of the Company) of their Common
Shares may, depending on their circumstances and subject as mentioned below, be subject to United
Kingdom capital gains tax or corporation tax on chargeable gains. The amount of the gain will be
the difference between the acquisition cost of the Common Shares and the disposal proceeds.
On a disposal of Common Shares by an individual investor who is resident or ordinarily resident in
the United Kingdom for tax purposes, the Common Shares may attract taper relief which reduces the
amount of chargeable gain according to how long, measured in years, the Common Shares have been
47

held. An investor which is a body corporate resident in the United Kingdom for tax purposes will
benefit from indexation allowance which, in general terms, increases the capital gains tax base cost of
an asset in accordance with the rise in the Retail Prices Index.
Stamp Duty and Stamp Duty Reserve Tax (SDRT)
No United Kingdom stamp duty or SDRT will arise on the issue of Common Shares. Generally, no
United Kingdom stamp duty or SDRT is payable on a transfer of or agreement to transfer Common
Shares executed outside of the United Kingdom. Transfers of Depositary Interests within CREST will
be subject to stamp duty reserve tax at the rate of 0.5 per cent. of the amount or value of the
consideration.
Section 739 UK Taxes Act
Individual investors ordinarily resident in the UK for tax purposes should note that Chapter III
(Sections 739 and 740) of Part XVII of the UK Taxes Act may render them liable to income tax in
respect of undistributed income or profits of the Company. These provisions are aimed at preventing
the avoidance of income tax by individuals through a transaction resulting in the transfer of assets or
income to persons (including companies) resident or domiciled abroad. However, these provisions will
not apply if the investor can satisfy the Inland Revenue that either:
(1)

the purpose of avoiding liability to United Kingdom taxation was not the purpose or one of the
purposes of his investment in the Company; or

(2)

the investment was a bona fide commercial transaction and was not designed for the purpose of
avoiding United Kingdom taxation.

Controlled Foreign Companies Legislation

The attention of companies resident in the United Kingdom is drawn to the fact that the controlled
foreign companies provisions contained in Sections 747 to 756 of the UK Taxes Act could be
material to any company so resident that has an interest in the Company such that 25 per cent. or
more of the Companys profits for an accounting period could be apportioned to them, if at the same
time the Company is controlled by companies or other persons who are resident in the United
Kingdom for taxation purposes. The effect of such provisions could be to render such companies
liable to United Kingdom corporation tax in respect of their share of the undistributed income and
profits of the Company.
Section 13 Taxation of Chargeable Gains Act 1992 (TCGA)
The attention of United Kingdom investors resident or ordinarily resident and, if an individual,
domiciled in the United Kingdom is drawn to the provisions of Section 13 TCGA under which, in
certain circumstances, a portion of capital gains made by the Company can be attributed to an
investor who holds, alone or together with associated persons, more than 10 per cent. of the
Common Shares. The capital gains attributed to the investor may (in certain circumstances) be liable
to United Kingdom tax on capital gains in the hands of the investor.
Other Jurisdictions
Potential purchasers of Common Shares should consult their own professional tax advisors as to the
tax consequences of the purchase, ownership and disposition of Common Shares. Any person who is
in any doubt as to his tax position or requires more detailed information than the general outline above
should consult his professional advisers.

48

PART 11
ADDITIONAL INFORMATION
1
1.1

The Company
The Company was incorporated on 7 June 2005 in the British Virgin Islands under the IBCA
as an International Business Company with registered number 660270.

1.2

The principal legislation under which the Company operates is the IBCA and regulations made
thereunder.

1.3

The Companys main activity is that of an investment company.

1.4

The registered office of the Company is at Vanterpool Plaza, 2nd Floor, Wickhams Cay 1,
Road Town, Tortola, British Virgin Islands (telephone number +284 494 5959).

1.5

The liability of the members of the Company is limited.

1.6

The Company is the holding company of the following subsidiaries all of which are whollyowned:
Name

Date of Incorporation and

Country of Incorporation

Registered Office

Issued Share Capital

DolphinCI One Ltd

11.10.05
Cyprus

G.Kranidioti
6th Floor
Nice Day House
P.C. 1065 Nicosia
Cyprus

1,000 shares of
CYP1.00 each

DolphinCI Two Ltd.

11.10.05
Cyprus

As above

1,000 shares of
CYP1.00 each

DolphinCI Three Ltd.

11.10.05
Cyprus

As above

1,000 shares of
CYP1.00 each

DolphinCI Four Ltd.

11.10.05
Cyprus

As above

1,000 shares of
CYP1.00 each

Dolphin Holdings One Ltd.

11.10.05
British Virgin Islands

Vanterpool Plaza
2nd Floor
Wickhams Cay 1
Road Town
Tortola
British Virgin Islands

10,000 common shares

of A1.00 each

Dolphin Holdings Two Ltd.

11.10.05
British Virgin Islands

As above

10,000 common shares

of A1.00 each

The directors of the above subsidiaries are Miltos Kambourides and Pierre Charalambides. At
the date of this document all of the above subsidiaries other than DolphinCI Two Ltd. are
dormant.

2
2.1

Share Capital
The authorised share capital and issued share capital of the Company (i) as at the date of this
document and (ii) as it will be immediately following Admission is set out below:
Authorised

No. of Common Shares

(i)
(ii)

500,000,000
500,000,000

Issued
Nominal
Value A

No. of Common
Shares

Nominal
Value A

5,000,000
5,000,000

5,000,000
109,000,000

50,000
1,090,000

49

2.2

The authorised share capital of the Company on its incorporation was A100,000 divided into
10,000,000 Common Shares of A0.01 each. Since the date of incorporation the following
changes have occurred to the Companys authorised and issued share capital:

2.2.1 on the 7 June 2005, 1 Common Share was allotted to the Investment Manager as the initial
subscriber of the Company, which share was paid up as to A1.00.
2.2.2 on 15 July 2005, 99 Common Shares were allotted to the Investment Manager, which were
paid up as to A1.00 per share;
2.2.3 on 1 August 2005, 4,999,900 Common Shares were allotted for an aggregate consideration of
A4,999,900; and
2.2.4 on 7 December 2005, the authorised share capital of the Company was increased to A5,000,000
divided into 500,000,000 Common Shares.
2.3

As at the date of this document the authorised share capital of the Company is A5,000,000
divided into 500,000,000 Common Shares of which 5,000,000 Common Shares are in issue and
are fully paid.

2.4

The Common Shares have been created by the Company under the provisions of the IBCA
and have been assigned with ISIN VGG2803G1028 and CUSIP G2803G102. The Depository
Interests have been credited by the Depositary pursuant to a deed poll dated 21 November
2005 and have been assigned the same ISIN number as the Common Shares.

2.5

On 6 December 2005, the Founding Shareholder Warrants were issued to the Founding
Shareholders.

2.6

Save as referred to in paragraphs 2.2 to 2.4 above and pursuant to the Placing, since the date
of its incorporation no share or loan capital of the Company has been issued or agreed to be
issued, or is now proposed to be issued, for cash or any other consideration and no
commissions, discounts, brokerages or other special terms have been granted by the Company
in connection with the issue of any such capital.

2.7

Save for the Founding Shareholder Warrants, no share or loan capital of the Company is
under option or has been agreed, conditionally or unconditionally, to be put under option.

2.8

The issue of the Placing Shares will dilute the holdings of the Founding Shareholders by 95.4
per cent.

3
Memorandum and Articles of Association
The Memorandum of Association of the Company provides that the Companys principal object is to
carry on the business, amongst other things, of an investment company. The objects of the Company
are set out in full in clause 4 of its Memorandum of Association.
The Articles of Association of the Company contain, inter alia, provisions to the following effect:
3.1
Voting
Section 62 (1) of the IBCA deals with the voting rights of shareholders. This section provides that
except as otherwise provided in the Memorandum or Articles of Association, all shares vote as one
class and each whole share has one vote. There are no contrary provisions in the Memorandum or
Articles of Association of the Company.
3.2
Return of Capital on Winding-Up
Section 92(1) of the IBCA deals with the distribution of assets by a liquidator on a winding-up of the
Company. Subject to payment of, or to discharge of, all claims, debts, liabilities and obligations of
the Company any surplus shall then be distributed amongst the members according to their rights
and interests in the Company according to the Memorandum and Articles of Association of the
Company. Subject to the rights of the holders of shares issued upon special conditions if the assets
available for distribution to members shall be insufficient to pay the whole of the paid up capital
such assets shall be shared on a pro rata basis amongst members entitled to them by reference to the
number of fully paid up shares held by such members respectively at the commencement of the
winding up.
3.3
Variation of Class Rights
If at any time the authorised capital is divided into different classes or series of shares, the rights
attached to any class or series (unless otherwise provided by the terms of issue of the shares of that
class or series) may, whether or not the Company is being wound up, be varied with the consent in
50

writing of the holders of not less than three-fourths of the issued shares of that class or series and of
the holders of not less than three-fourths of the issued shares of any other class or series of shares
which may be affected by such variation.
3.4
Reduction or Increase in Authorised Capital or Capital
The Company may by a resolution of the Directors amend the Memorandum of Association to
increase or reduce its authorised capital and in connection therewith the Company may in respect of
any unissued shares increase or reduce the number of such shares, increase or reduce the par value of
any such shares or effect any combination of the foregoing.
The Company may amend the Memorandum of Association to:
(a)

divide the shares, including issued shares, of a class or series into a larger number of shares of
the same class or series; or

(b)

combine the shares, including issued shares, of a class or series into a smaller number of shares
of the same class or series,

provided, however, that where shares are divided or combined under paragraph (a) or (b) above, the
aggregate par value of the new shares must be equal to the aggregate par value of the original shares.
The capital of the Company may by a resolution of Directors be increased by transferring an amount
of the surplus of the Company to capital.
The share capital Company may by resolution of the Directors be reduced by:
(a)

returning to Shareholders any amount received by the Company upon the issue of any of its
shares, the amount being surplus to the requirements of the Company,

(b)

cancelling any capital that is lost or not represented by assets having a realisable value, or

(c)

transferring capital to surplus for the purpose of purchasing, redeeming or otherwise acquiring
shares that the Directors have resolved to purchase, redeem or otherwise acquire.

No reduction of capital shall be effected that reduces the capital of the Company to an amount that
immediately after the reduction is less than the aggregate par value of all outstanding shares with par
value and all shares with par value held by the Company as treasury shares and the aggregate of the
amounts designated as capital of all outstanding shares without par value and all shares without par
value held by the Company as treasury shares that are entitled to a preference, if any, in the assets of
the Company upon liquidation of the Company.
No reduction of capital shall be effected unless the Directors determine that immediately after the
reduction the Company will be able to satisfy its liabilities as they become due in the ordinary course
of its business and that the realisable assets of the Company will not be less than its total liabilities,
other than deferred taxes, as shown in the books of the Company and its remaining capital, and, in
the absence of fraud, the decision of the directors as to the realisable value of the assets of the
Company is conclusive, unless a question of law is involved.
3.5
Transfer of Shares
Registered shares in the Company may be transferred by a written instrument of transfer signed by
the transferor and containing the name and address of the transferee, but in the absence of such
written evidence of transfer the directors may accept such evidence of a transfer of shares as they
consider appropriate. The Company may also issue shares in uncertificated form.
The Company shall not be required to treat a transferee of a registered share in the Company as a
member until the transferees name has been entered in the share register.
The board of Directors may, in its absolute discretion, and without assigning any reason therefore,
refuse to register any transfers of shares which are not fully paid provided that such discretion may
not be exercised in such a way as to prevent dealings in the shares of a class from taking place on an
open and proper basis.
The Company must on the application of the transferor or transferee of a registered share in the
Company enter in the share register the name of the transferee of the share save that the registration
of transfers may be suspended and the share register closed at such times and for such periods as the
Company may from time to time by resolution determine provided always that such registration shall
not be suspended and the share register closed for more than 60 days in any period of 12 months.
51

3.6
Dividends
The Company may by a resolution of Directors declare and pay dividends in money, shares, or other
property but dividends shall only be declared and paid out of surplus. In the event that dividends are
paid in specie the Directors shall have responsibility for establishing and recording in the resolution of
directors authorising the dividends, a fair and proper value for the assets to be so distributed. There
are no fixed dates on which an entitlement to dividends arises.
The Directors may from time to time pay to the Shareholders such interim dividends as appear to the
Directors to be justified by the profits of the Company.
The Directors may, before declaring any dividend, set aside out of the profits of the Company such
sum as they think proper as a reserve fund, and may invest the sum so set apart as a reserve fund
upon such securities as they may select.
No dividends shall be declared and paid unless the Directors determine that immediately after the
payment of the dividend the Company will be able to satisfy its liabilities as they become due in the
ordinary course of its business and the realisable value of the assets of the Company will not be less
than the sum of its total liabilities, other than deferred taxes, as shown in its books of account, and
its capital. In the absence of fraud, the decision of the Directors as to the realisable value of the
assets of the Company is conclusive, unless a question of law is involved. All dividend payments shall
be non-cumulative.
Notice of any dividend that may have been declared shall be given to each member in the manner
hereinafter mentioned and all dividends unclaimed for 3 years after having been declared may be
forfeited by resolution of the Directors for the benefit of the Company.
No dividend shall bear interest as against the Company and no dividend shall be paid on treasury
shares or shares held by another company of which the Company holds directly or indirectly, shares
having more than 50 per cent. of the vote in electing directors.
A share issued as a dividend by the Company shall be treated for all purposes as having been issued
for money equal to the surplus that is transferred to capital upon the issue of the share.
In the case of a dividend of authorised but unissued shares with par value, an amount equal to the
aggregate par value of the shares shall be transferred from surplus to capital at the time of the
distribution.
In the case of a dividend of authorised but unissued shares without par value, the amount designated
by the Directors shall be transferred from surplus to capital at the time of the distribution, except
that the Directors must designate as capital an amount that is at least equal to the amount that the
shares are entitled to as a preference, if any, in the assets of the Company upon liquidation of the
Company.
A division of the issued and outstanding shares of a class or series of shares into a larger number of
shares of the same class or series having a proportionately smaller par value does not constitute a
dividend of shares.
Subject to any resolution by the Shareholders the unissued shares of the Company shall be at the
disposal of the Directors who may without prejudice to any rights previously conferred on the holders
of any existing shares or class or series of shares offer, allot, grant options over or otherwise dispose
of shares to such persons, at such times and upon such terms and conditions as the Company may
by resolution of the Directors determine.
3.7
Pre-emption Rights
There is no provision of BVI law or the Articles which confer rights of pre-emption upon the issue or
sale of any Common Shares.
3.8
Suspension of rights (transfers, meetings and dividends)
If a Shareholder or any other person appearing to be interested in shares of the Company fails after
the date of service of a notice to comply with the disclosure requirements (as summarized in
paragraph 3.9 below) then from the time of such failure until after the earlier of (a) receipt by the
Company of notice that there has been a transfer of the shares by an arms length sale and (b) due
compliance, to the satisfaction of the Company, with the disclosure requirements (if the Directors so
resolve) such Shareholder shall not be entitled to attend or vote or to exercise any right conferred by
membership at meetings of the Company in respect of the shares which are the subject of such
notice. Where the holding represents more than 0.25 per cent. of the issued shares of that class, the
payment of dividends may be withheld, and such Shareholder shall not be entitled to transfer such
shares otherwise than by an arms length sale. This provision is more stringent than any requirement
of BVI law.
52

3.9
Ownership Threshold for Shareholder Disclosure
A Shareholder is required to notify the Company when he acquires or disposes of a material interest
in shares in the capital of the Company equal to or in excess of 3 per cent. of the aggregate nominal
value of that share capital. This provision is more stringent than any requirement of BVI law.
3.10 General Meetings
The Company is not required to hold an annual general meeting in any year. The Directors may
convene meetings of the Shareholders of the Company at such times and in such-manner and places
within or outside the British Virgin Islands as the Directors consider necessary or desirable. Upon the
written request of Shareholders holding 10 per cent. or more of the outstanding voting shares in the
Company the Directors shall convene a meeting of Shareholders.
The Director shall give not less than 7 days notice of a meetings of Shareholders to those persons
whose names at the close of business on a day to be determined by the Directors appear as
Shareholders in the share register of the Company and are entitled to vote at the meeting.
A meeting of Shareholders may be called on short notice:
(a)

if Shareholders holding not less than 90 per cent. of the total number of shares entitled to vote
on all matters to be considered at the meeting, or 90 per cent. of the votes of each class or
series of shares where Shareholders are entitled to vote thereon as a class or series together
with not less than a 90 per cent. majority of the remaining votes, have agreed to short notice
of the meeting, or

(b)

if all Shareholders holding shares entitled to vote on all or any matters to be considered at the
meeting have waived notice of the meeting; and for this purpose presence at the meeting shall
be deemed to constitute waiver.

A meeting of Shareholders is duly constituted if, at the commencement of the meeting, there are
present in person or by proxy not less than 50 per cent. of the votes of the shares or class or series
of share entitled to vote on resolutions of Shareholder to be considered at the meeting. If a quorum
be present, notwithstanding the fact that such quorum may be represented by only one person then
such person may resolve any matter and a certificate signed by such person accompanied where such
person be a proxy by a copy of the proxy form shall constitute a valid resolution of Shareholders.
If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if
convened upon the requisition of Shareholders, shall be dissolved; in any other case it shall stand
adjourned to the next business of the day at the same time and place or to such other time and place
as the Directors may determine, and if at the adjourned meeting there are present within one hour
from the time appointed for the meeting in person or by proxy not less than one third of the votes
of the shares of each class or series of shares entitled to vote on the resolutions to be considered by
the meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved. The
Chairman, may, with the consent of the meeting, adjourn any meeting from time to time, and from
place to place, but no business shall be transacted at any adjourned meeting other than the business
left unfinished at the meeting from which the adjournment took place.
An action that may be taken by the Shareholders at a meeting may also be taken by a resolution of
Shareholders consented to in writing or by telex, telegram, cable, facsimile or other written electronic
communications, without the need for any notice, but if any resolution of Shareholders is adopted
otherwise than by the unanimous written consent of all Shareholders, a copy of such resolution shall
forthwith be sent to all Shareholders not consenting to such resolution.
3.11 Directors
The Directors shall be elected by the Shareholders for such term as the Shareholders determine. The
minimum number of Directors shall be one and the maximum number shall be seven. At no time
shall a majority of Directors be resident in the United Kingdom.
The business and affairs of the Company shall be managed by the Directors who may exercise all
such powers of the Company as are not by the IBCA or by the Memorandum or the Articles
required to be exercised by the Shareholders of the Company, subject to any delegation of such
powers as may be authorised by the Articles and to such requirements as may be prescribed by a
resolution of Shareholders.
The Directors or any committee thereof may meet at such times and in such manner and places
within or outside the British Virgin Islands as the Directors may determine to be necessary or
desirable. Questions arising at any meeting shall be decided by a majority of votes. In case of an
equality of votes the Chairman at the meeting shall have a second or casting vote, but only if the
effect of the exercise of such a vote is not to render a decision or vote in question one which is
53

reached or passed by a majority of the Directors who are resident in the United Kingdom. All
meetings of Directors shall take place outside the United Kingdom and any decision reached or
resolution passed by the Directors at any meeting not held outside the United Kingdom or at which
a majority of Directors resident in the United Kingdom is present shall be invalid and of no effect.
An action that may be taken by the Directors or a committee of Directors at a meeting may also be
taken by a resolution of Directors or a committee of Directors consented to in writing or by telex,
telegram, cable, facsimile or other written electronic communication by all Directors or the committee
as the case may be, without the need for any notice. No such resolution shall be valid if a majority
of the Directors sign the resolution in the United Kingdom.
No agreement or transaction between the Company and one or more of its Directors or any person
in which any Director has a financial interest or to whom any Director is related, including as a
Director of that other person, is void or voidable for this reason only or by reason only that the
Director is present at the meeting of Directors or at the meeting of the committee of Directors that
approves the agreement or transaction or that the vote or consent of the Director is counted for that
purpose if the material facts of the interest of each Director in the agreement or transaction and his
interest in or relationship to any other party to the agreement or transaction are disclosed in good
faith or are known by the other Directors.
4
Summary of British Virgin Islands Company Law
The Company is incorporated in the BVI as an International Business Company (IBC) and is
subject to BVI law. Certain provisions of BVI company law are summarised below. The following is
not intended to provide a comprehensive review of the applicable law, or of all provisions which
differ from equivalent provisions in jurisdictions with which interested parties may be more familiar.
This summary is based upon the law and the interpretation thereof applicable as at the date hereof
and is subject to change.
4.1
Share Capital
The IBCA places unissued shares and treasury shares in an IBC under the control of its directors.
Subject to provisions to the contrary contained in the memorandum of association (memorandum)
or articles of association (articles) and without affecting rights previously conferred upon
shareholders, the directors have the power to offer, allot, grant options over or otherwise dispose of
such shares. The IBCA requires that shares in IBCs may not be issued until they are fully paid up.
Shares may be issued for money, services rendered, personal property, an estate in real property, a
promissory note or other binding obligation to contribute money or property (subject to forfeiture),
or any combination thereof. The value of the consideration must be at least in the amount of the par
value of shares having a par value. Shares may also be created without par value.
If shares are issued at an amount in excess of the par value, the difference between the par value and
the amount of consideration paid for the share constitutes surplus. Consideration paid for treasury
shares is also added to surplus. Shares may be issued by way of a dividend and are treated as having
been issued for an amount equal to the amount transferred from surplus to capital.
Under BVI law, provision may be made in the memorandum or articles for a company to forfeit
shares, for which the consideration was a promissory note or other binding obligation to pay a debt
for which payment is not made upon proper notice. There is no requirement that payment for
cancelled shares be refunded.
Subject to any contrary provisions in an IBCs memorandum and articles, an IBC may amend its
memorandum and articles to increase or reduce its authorised capital and/or the par value of any of
its shares. A company may also amend its Memorandum to divide shares into a larger number of
classes or series or to combine shares into a smaller number of classes or series.
Subject to any contrary provisions in an IBCs memorandum and articles an IBC may issue shares
with or without voting rights or with different voting rights; common, preferred, limited or
redeemable shares; options warrants or similar rights to acquire any securities of the IBC; and
securities convertible into or exchangeable for other securities or property of the IBC.
4.2
Financial Assistance to Purchase Shares of an IBC or its Holding Company
Financial assistance to purchase shares of an IBC or its holding company is not prohibited or
controlled by the IBCA. However, practice is to treat it as a reduction of capital. Such financial
assistance may therefore only be made out of surplus and subject to certain other conditions and if
the directors determine that immediately following the grant of the assistance, the IBC will be able to
54

meet its debts as they fall due and that the realisable value of its assets will exceed or equal its
liabilities. This determination will need to be supported by a declaration of solvency and a balance
sheet.
4.3
Purchase of own Shares by an IBC
An IBC may purchase its own shares out of surplus or in exchange for newly issued shares of equal
value, subject to provisions to the contrary in the IBCs memorandum or articles. The consent of the
member whose shares are to be purchased is required, unless the memorandum and articles or the
conditions attached to the shares or the subscription agreement based upon which the shares were
issued specify that no such consent is required. Furthermore, for the purchase to be permissible in
most cases the directors must determine that the IBC will be able to meet its liabilities and that the
IBCs realisable assets will equal or exceed its liabilities immediately after the purchase. Any purchase
of its own shares at a price lower than the fair value must be authorised by the IBCs memorandum
or articles or by a written subscription agreement.
A subsidiary may hold shares in its parent company but if it does so, such shares carry no voting or
dividend rights and are not treated as outstanding, except for the purpose of determining the capital
of the parent.
4.4
Dividends and Distribution
Dividends in money, shares or other property may be declared by the directors and paid out of
surplus, subject to an IBCs memorandum and articles, provided that the directors determine that the
IBC will be solvent and able to satisfy its liabilities immediately after payment of the dividend.
Surplus is defined as the excess of assets over liabilities, plus capital.
4.5
Protection of Minorities
BVI law generally does not permit class actions or derivative actions by shareholders. However, the
courts may consider claims by shareholders alleging that an IBC has acted ultra vires, illegally or
fraudulently, or that (subject to certain conditions) a particular transaction involving a director is
unfairly prejudicial to one or more of its members. A member may apply to the court for an order to
inspect the IBCs books if a written requires to do so is improperly refused by the directors.
A majority of the shareholders must approve any proposed merger of the IBC or the disposal of
more than 50 per cent. of its assets, outside of the ordinary course of business, unless the same is
approved by a court order for a statutory arrangement. Shareholders dissenting from the proposal
or from any arrangement (which may cover other types of reorganisation or reconstruction of the
IBC) are entitled to require the IBC to pay the fair value of their shares, in accordance with the
procedures and conditions laid down by the IBCA.
The IBCA does not prescribe procedures for variation of the rights of different classes of
shareholders, the rights of such shareholders to be consulted prior to any adverse change are
governed by common law, however the articles of the Company contain specific provisions. See
paragraph 3.3 above.
4.6
Management
Subject to the memorandum and articles, an IBC is managed by its board of directors, who each
have full authority to bind the company. Directors are required under BVI law to act honestly and in
good faith with a view to the best interests of the IBC, and to exercise the care, diligence and skill of
a reasonably prudent person. As mentioned above, certain actions require prior approval of the
shareholders, as a matter of statute.
4.7
Accounting and Auditing Requirements
BVI law makes no specific provision for the types of books and records to be maintained. It requires
only that an IBC keep such accounts and records as the directors of the IBC consider necessary or
desirable in order to reflect the financial position of the IBC. There is no statutory requirement to
audit or file annual accounts unless the IBC is engaged in certain businesses, which require a licence
under BVI law.
4.8
Exchange Control
BVI IBCs are not subject to any exchange control regulations in the BVI.
4.9
Stamp Duty
No stamp duty is payable in the BVI in respect of instruments relating to transactions involving
IBCs. An IBC cannot hold real property in the BVI.
55

4.10 Loans to and Transactions with Directors

Subject to the memorandum and articles, and to the proviso that the transaction is not unfairly
prejudicial to one or more members or to the creditors of the IBC, the IBCA permits directors to
enter in transactions with the IBC in either of the two following circumstances; (i) the agreement or
transaction is approved at a meeting of directors, where the material facts of the directors interest
are fairly disclosed or are otherwise known to the directors, and where approval of the transaction
does not require the vote of the interested director(s), or it is approved by the unanimous vote of the
disinterested directors; or (ii) the transaction is approved or ratified by a shareholders resolution,
where the material facts or the directors interest are fairly disclosed or are otherwise known to the
members.
4.11 Inspection of Corporate Records
Members of an IBC may inspect the IBCs books and records, pursuant to a written request and in
furtherance of a proper purpose (i.e. a purpose reasonably related to the members interest as a
member). However, the directors have power to refuse the request on the grounds that the inspection
is not in the best interest of the IBC or of any other member of the IBC.
The only corporate records generally available for inspection by members of the public are those
required to be maintained at the BVI Companies Register, namely the Certificate of Incorporation
and memorandum and articles together with any amendments thereto. An IBC may elect to maintain
a copy of its share register, register or directors and/or register of mortgages, charges and other
encumbrances (if any) at the Registry, but this is not required under BVI law. These documents are,
however, maintained in the office of the companys registered agent and may be inspected with the
IBCs consent, or in limited circumstances pursuant to a court order.
4.12 Winding-Up
The IBCA and the BVI Companies Act (Cap. 285) (in the case of insolvency) make provision for
both voluntary and compulsory winding-up of an IBC, and for appointment of a liquidator. The
members or the directors may resolve to wind-up the IBC voluntarily. If it is the directors who
resolve to commence the winding-up, they must present a plan of dissolution for approval by the
members, incorporation the matters set forth in the statute.
The IBC, any contributory and any creditor may petition the court pursuant to the Companies Act
(Cap. 285), for the winding-up of the IBC upon various grounds, inter alia, that the IBC is unable to
pay its debts or that it is just and equitable that the IBC should be wound up.
4.13 Takeovers
Generally the merger or consolidation of an IBC requires shareholder approval. However an IBC
parent company may merge with one or more BVI subsidiaries without member approval, provided
that the surviving company is also an IBC. Members dissenting from a merger are entitled to
payment of the fair value of their shares unless the IBC is the surviving company and the members
continue to hold a similar interest in the surviving company. The IBCA permits IBCs to merge with
companies incorporated outside the BVI, provided the merger is lawful under the laws of the
jurisdiction in which the non-BVI company is incorporated.
Under the IBCA which is modelled on US corporate statutes, following a statutory merger, one of
the companies is subsumed into the other (the surviving company) or both are subsumed into a third
company (a consolidation). In either case, with effect from the effective date of the merger, the
surviving company assumes all of the assets and liabilities of the other entity(ies) by operation of law
and other entities cease to exist.
There is no takeover code or similar regulations governing takeover offers applicable in the BVI.
5
5.1

Directors and Others Interests

The interests of the Directors, all of which are beneficial, in the issued share capital of the
Company as at the date of publication of this document and as they are expected to be
immediately following Admission, are as follows:

Name

Common Shares as
at the date of this
document

% of issued
share capital

Common Shares
following
Admission

% of issued
share capital

233,100*

4.7

233,100*
50,000
5,000

Miltos Kambourides
Nicholas Moy
Andreas Papageorghiou
56

These Common Shares are held by the Investment Manager the ultimate beneficial owners of which are Miltos Kambourides
and Pierre Charalambides.

5.2

Save as disclosed above, none of the Directors has any interests, beneficial or otherwise, in the
share capital of the Company nor does (so far as is known to, or could with reasonable
diligence be ascertained by, the Directors) any person connected with the Directors have any
interests in such share capital, in each case whether or not held through another party.

5.3

The services of the Non-executive Directors are provided under the terms of letters of
appointment between the Company and each of them effective from 1 August 2005. With the
exception of Mr Moy and Mr Kambourides, the appointment of each Director is terminable
immediately by a resolution of the board of Directors. Mr Moys appointment cannot be
terminated without good cause in the first 12 months. Mr Kambourides may only be removed
as a Director pursuant to a vote of the Shareholders in accordance with the Articles. From
Admission each Director shall be paid a fee of A15,000 per annum. These fees may be waived
at the discretion of each Director. Mr Kambourides has waived such fees for as long as he is
interested in any Investment Manager. Mr Achilleoudis has also waived such fees. In the event
that the agreements are terminated otherwise than for good cause each Director is entitled to
receive 25 per cent. of his annual fee as a termination payment.

5.4

Details of the length of time in which the Directors in the first financial period of the
Company to 31 December 2005 have been in office and the period of their term of office are
set out below:
Name

Commencement of period of office

Date of expiration of term of office

Andreas Papageorghiou
Nicholas Moy
Cem Duna
Antonios Achilleoudis
Miltos Kambourides

1
1
1
1
1

until
until
until
until
until

August
August
August
August
August

2005
2005
2005
2005
2005

removed
removed
removed
removed
removed

5.5

There are no service contracts in existence between the Company and any of its Directors, nor
are any such contracts proposed.

5.6

In addition to their directorships in the Company, the Directors have held the following
directorships and/or been a partner in the following partnerships within the five years prior to
the date of this document:
(i)

(ii)

(iii)

(iv)

(v)

Andreas Papageorghiou

Nicholas Moy

Cem Duna

Antonios Achilleoudis

Miltos Kambourides

Current:

A. N. Papageorghiou & Associates (Partnership)

Nicosia Old People Home

Past:

Quantum Corporation
Nicosia Race Club

Current:

Gryphon Central Europe Ltd.

Rother Meads Tennis & Games Clubs Ltd
Greenpark Capital Ltd.
The Tunisia Fund Ltd.
Callander Granville Euromanagement Fund
SICAF (Luxembourg)

Past:

Tasking B.V. (Netherlands)

Viscount Catering Equipment Group Limited
Gryphon Emerging Markets Ltd.
GranIberia Fund SICAV (Luxembourg)

Current:

AB Consultancy Investment Services Co.

Boynar Holding Co.
Dogan Media Holding Co.
letmeleri Co.
C
ayeli Bakyr Y

Past:

None

Current:

Axia Ventures Limited

Axia Asset Management Limited

Past:

Gruntal & Co. LLC

Current:

Dolphin Capital Partners Limited

57

Soros Real Estate Partners (partnership)

Past:

Mapeley Limited
Mapeley STEPS Contractors Limited
Hellenic Land International S.A.
Hellenic Land Holdings B.V.

5.7

Nicholas Moy was a former non-executive director of Viscount Catering Equipment Group Ltd
which went into administrative receivership in January 1992 and which was formally dissolved
in November 2001. Mr Moy was acting as the board representative of certain private equity
investor groups.

5.8

Save as disclosed above, no Director:

5.8.1 has any unspent convictions in relation to indictable offences; or

5.8.2 has been bankrupt or the subject of an individual voluntary arrangement, or has had a receiver
appointed to any asset of such director; or
5.8.3 has been a director
he ceased to be a
creditors voluntary
any composition or
or

of any company which, while he was a director or within 12 months after

director, had a receiver appointed or went into compulsory liquidation,
liquidation, administration or company voluntary arrangement, or made
arrangement with its creditors generally or with any class of its creditors;

5.8.4 has been a partner of any partnership which, while he was a partner or within 12 months after
he ceased to be a partner, went into compulsory liquidation, administration or partnership
voluntary arrangement, or had a receiver appointed to any partnership asset; or
5.8.5 has had any public criticism by statutory or regulatory authorities (including recognised
professional bodies); or
5.8.6 has been disqualified by a court from acting as a director of a company or from acting in the
management or conduct of the affairs of any company.
5.9

Save as disclosed in paragraph 5.1 above, and as set out below, the Directors are not aware of
any person, directly or indirectly, jointly or severally, who exercises or could exercise control
over the Company or who is interested directly or indirectly in 3 per cent. or more of the
issued share capital of the Company as at the date of the publication of this document and
immediately following Admission:
58

Name

Henderson Global Investors

Ltd.
Trafelet & Co. UK LLP
Lansdowne Partners Ltd.
Framlington Investment
Management Ltd.
National Bank of Greece
(Client Portfolio)
M&G Investment
Management Ltd.
Cazenove Capital
Management Ltd.
Goldman Sachs
International
National Bank of Greece
SVM Asset Management
Ltd.
UBS AG
Drawbridge Global Macro
Fund Ltd.*
Wesley R. Edens
George Dimitropoulos
R&H Trust Co. (Jersey)
Limited as Trustee of the
De Conick Trust
Euro-Inn Investments S.A.
Constantine Dakolias
Sparta Asset Management
Ltd
Athanasios Pipilis

Common Shares as
at the date of this
Document

% of issued
share capital

Common Shares
following
Admission

% of issued
share capital

10,125,000
10,125,000
8,325,000

9.3
9.3
7.6

7,000,000

6.4

6,800,000

6.2

6,475,000

5.9

6,397,000

5.9

5,000,000
5,000,000

4.6
4.6

4,500,000
4,300,000

4.1
3.9

2,195,000
605,000
500,000

43.9
12.1
10.0

2,195,000
605,000
500,000

2.0
0.6
0.5

365,000
300,000
200,000

7.3
6.0
4.0

365,000
300,000
200,000

0.3
0.3
0.2

160,000
150,000

3.2
3.0

160,000
150,000

0.1
0.1

* Fund managed by Fortress

5.10

Neither the Directors nor the persons set out above will have upon Admission voting rights in
respect of the share capital of the Company which differ from those of any other Shareholder.

5.11

No loans have been made or guarantees granted or provided by the Company to or for the
benefit of any Director.

5.12

Save as set out in this document, the Directors are not aware of any arrangements which may
at a subsequent date result in a change of control of the Company.

5.13

Save as set out in this document, no Director is or has been interested whether directly or
indirectly in any transaction which is or was unusual in its nature or conditions or significant
to the business of the Company and which was effected by the Company and remains in any
respect outstanding or unperformed.

6
Material Contracts
The following contracts, not being contracts entered into in the ordinary course of business, have
been entered into by the Company since incorporation and are or may be material:
6.1

A placing agreement dated 6 December 2005 between the Company, the Directors, the
Investment Manager, Panmure Gordon and Grant Thornton Corporate Finance whereby
Panmure Gordon was appointed as the agent of the Company for the purpose of managing
the Placing and has agreed to use reasonable endeavours to procure placees to subscribe for
the Placing Shares at the Placing Price. Pursuant to the Placing Agreement, the Company and
its Directors have given certain warranties and indemnities to Panmure Gordon and Grant
Thornton Corporate Finance regarding, inter alia, the accuracy of the information in this
document. The Placing Agreement is conditional, inter alia, on Admission taking place no later
than 8.00 a.m. on 8 December 2005, or such later date as the Company and Panmure Gordon
may agree being no later than 16 December 2005 and the Company and the Directors
complying with certain obligations under the Placing Agreement. Under the Placing Agreement,
59

the Company has agreed to pay to Panmure Gordon a commission of 3.5 per cent. on the
aggregate value of the Placing Shares at the Placing Price, together with all costs and expenses
and VAT thereon, where appropriate.
Panmure Gordon is entitled in certain limited circumstances to terminate the Placing
Agreement prior to Admission.
The Placing Agreement also contains a lock-in undertaking from each of the Directors, and
the Investment Manager (including any of their associates within the meaning of the AIM
Rules) pursuant to Rule 7 of the AIM Rules, under which the covenanting parties have agreed
not to sell or otherwise dispose of, or agree to sell or dispose of, any of their interests in the
Common Shares held by them respectively at Admission (or resulting from their holding of
such shares) for a period of 12 months from Admission. The agreement is governed by English
law.
6.2

Lock-in agreement dated 6 December 2005 between the Company, Panmure Gordon, Grant
Thornton Corporate Finance and each of the Founding Shareholders (with the exception of
the Investment Manager which is subject to the lock-in agreement contained in the placing
agreement as summarised at paragraph 6.1 above) pursuant to the terms of which each such
contracting Founding Shareholder has agreed not to dispose of any Common Shares held by
them at Admission until the date on which of the Founding Shareholder Warrants lapse
subject to certain exceptions including transfers or disposals made with the written consent of
the Company, Grant Thornton Corporate Finance and Panmure Gordon, transfers to their
associates or family trusts and transfers in acceptance of certain takeover offers for the
Company. These agreements are governed by English law.

6.3

The Founding Shareholder Warrant Instrument (the Instrument) dated 5 December 2005
whereby the Company constituted the Founding Shareholder Warrants. Under the terms of the
Instrument a series of warrants have been issued to the Founding Shareholders which entitle
the Founding Shareholders to subscribe at par value per Common Share of A0.01, for such
number of Common Shares (capped at 12.5 million Common Shares) which when multiplied
by the Placing Price of A1 equals 50 per cent. of the difference between the market value of
the Companys legal interest in the Prospective Investment Portfolio at acquisition and its cost
of investment. The valuation of the Companys legal interest in the Prospective Investment
Portfolio (the Valuation) will be carried out by the Companys Property Valuer and the
Valuation will be approved by the Board. In carrying out such valuation the Property Valuer
will be able to adopt such valuation methodology as it thinks fit and, at the Companys
expense, retain the services of any appropriate third parties. In the absence of manifest error
the Valuation shall be final and binding on the Founding Shareholders and the Company.
The Founding Shareholder Warrants must be exercised within 30 days of the date of the
Valuation or else they will lapse.
The Founding Shareholder Warrants are not capable of assignment or transfer and are subject
to English Law.

6.4

An engagement letter dated 3 November 2005 between the Company and Panmure Gordon
pursuant to which the Company has appointed Panmure Gordon to act as Broker to the
Company for the purposes of AIM commencing on the date of the agreement. The Company
has agreed to pay Panmure Gordon a fee of 40,000 per annum payable in advance. The
agreement may be terminated immediately by either party on written notice. The agreement
contains various undertakings and indemnities from the Company. The agreement is governed
by English law.

6.5

An engagement letter dated 6 December 2005 between the Company and Grant Thornton
Corporate Finance pursuant to which the Company has appointed Grant Thornton Corporate
Finance to act as nominated adviser to the Company. The agreement contains certain
undertakings and indemnities from the Company. The agreement is terminable on 30 days
notice in writing by either party. The agreement is governed by English law.

6.6

An Investment Management Agreement dated 1 August 2005 between the Company and the
Investment Manager (which will be amended and restated with effect from Admission) whereby
the Investment Manager was appointed to manage the investments of the Company in
accordance with the investment policy from time to time approved by the Directors. Under the
terms of the agreement the Investment Manager has discretionary authority to manage the
assets of the Company and, subject to the approval of the Directors, the authority to purchase
and dispose of investments for the account of the Company.
60

The Investment Manager will receive an annual management fee payable quarterly in advance
equivalent to 2 per cent. per annum of the total funds raised by the Company, being initially
the gross proceeds of the Placing and the A5 million subscribed by the Founding Shareholders,
and subsequently including the proceeds of any further fund raisings.
In addition, in relation to any investment made by the Company the Investment Manager is
potentially entitled to a performance fee based on the net realised cash profits made by the
Company subject to the Company receiving the Relevant Investment Amount which is
defined as an amount equal to:
(i)

the total cost of the investment; plus

(ii)

a hurdle amount equal to an annualised percentage return of 8 per cent. compounded for
each year or fraction of a year during which such investment is held (the Hurdle); plus

(iii) a sum equal to the amount of any realised losses and/or write-downs in respect of any
other investment which has not already been taken into account in determining the
Investment Managers entitlement to a performance fee.
In the event that the Company has received distributions from an investment equal to the
Relevant Investment Amount any subsequent net realised cash profits arising shall be
distributed in the following order of priority:
(i)

first, 60 per cent. to the Investment Manager and 40 per cent. to the Company until the
Investment Manager shall have received an amount equal to 20 per cent. of such profits;
and

(ii)

second, 80 per cent. to the Company and 20 per cent. to the Investment Manager,

such that the Investment Manager shall receive a total performance fee equivalent to 20 per
cent. of the net realised cash profits. Entitlement to a performance fee accrues upon the
Company committing to an investment and becomes payable regardless of whether or not the
Investment Managers appointment has been terminated prior to such disposal.
In relation to each investment, if on the earlier of (i) disposal of the Companys interest in
that investment or (ii) 1 August 2015, the net realised cash proceeds from that investment are
less than the Relevant Investment Amount the Investment Manager shall pay to the Company
an amount equivalent to the difference between the net realised cash proceeds and the
Relevant Investment Amount. The maximum global amount payable by the Investment
Manager in relation to all investments where the clawback mechanism applies will not exceed
the aggregate performance fees previously received (net of tax) by the Investment Manager in
relation to other investments.
Half of any performance fee payable to the Investment Manager shall be placed in an escrow
account operated by the Administrator (the Escrow Account) until the date on which the
cumulative distributions made by the Company to its Shareholders first equals or exceeds the
total funds raised by the Company as at Admission (being the gross proceeds of the Placing
and the A5 million subscribed by the Founding Shareholders) (the Distributions Equalisation
Date). On the Distributions Equalisation Date, 50 per cent. of any escrowed funds will be
released to the Investment Manager (meaning that in aggregate the Investment Manager will
have received 75 per cent. of the performance fees payable). Upon the Company making
cumulative distributions equal to the total funds raised by the Company plus the Hurdle, any
remaining funds in the Escrow Account will also be released to the Investment Manager.
The Investment Management Agreement contains an indemnity from the Company in favour
of the Investment Manager against claims by third parties except to the extent the claim is due
to the gross negligence, wilful default, fraud, bad faith or material violation of the laws of any
relevant jurisdiction by the Investment Manager, or any of its associates or delegates. The
Investment Management Agreement is for a fixed term of ten years commencing on 1 August
2005. It may be extended beyond such term with the agreement of the Investment Manager
and the Company.
Under the terms of the Investment Management Agreement the Investment Manager is
required to devote its time and attention to the affairs of the Company and not to manage
other funds that are competitive with the Company until such time as 90 per cent. of the
Companys funds are committed to Projects. After that time the Investment Manager will be
free to manage funds that might be competitive with that of the Company.
Under the terms of the Investment Management Agreement, the Company is licensed to use
the Dolphin Capital Investors name for so long as the agreement continues but must within
one month of its termination cease to use the name.
61

The Company may summarily terminate the agreement immediately at any time without
penalty by notice in writing in circumstances (inter alia) where the Investment Manager has
entered into insolvency proceedings, is found liable for material breach of duty, gross
negligence, wilful default, fraud, bad faith, or a material violation of applicable laws in
connection with the performance of its duties under the Agreement or a material breach of the
agreement which is either irremediable or not remedied within 60 days of receipt by the
Investment Manager of a notice from the Company. In addition, if at any time there is any
change of control of the Investment Manager the Company may within 90 days of becoming
aware of any such event give not less than three months written notice to terminate the
Agreement and for the purposes of this provision change of control means Miltos
Kambourides being replaced in his role as the Managing Partner of the Investment Manager
by someone who is not reasonably acceptable to the Company. This agreement is governed by
English law.
6.7

The Administration Agreement dated 6 December 2005, between the Company and the
Administrator pursuant to the terms of which the Administrator is appointed to act as
administrator to the Company.
The Administrator will be entitled to receive a fee of 6 basis points of the net assets of the
Company plus borrowings, subject to a minimum monthly fee of A4,000 payable quarterly in
arrears. In addition the Administrator will be entitled to a fee of A2,500 for assistance in the
preparation of each set of financial reports and accounts, and a minimum annual fee of A2,500
for corporate secretarial services.
The Administrator shall be entitled to receive reimbursement of reasonable out-of-pocket
expenses on an ongoing basis. The agreement contains provisions under which the Company
exempts the Administrator from liability in the absence of fraud, wilful default, bad faith or
gross negligence for any liabilities, obligations, losses, or damages arising out of or in
connection with its performance of its duties under the agreement. Similarly, the Company has
agreed to indemnify the Administrator in respect of losses it may suffer in connection with the
performance of its duties under the agreement save to the extent that such losses are due to
fraud, wilful default, bad faith or negligence on the part of the Administrator. The agreement
may be terminated on not less than 90 days written notice by either party, provided that
termination may be made immediately in certain specified circumstances. The agreement is
governed by the law of the Isle of Man.

6.8

The Custodian Agreement dated 6 December 2005, between the Company and the Custodian
pursuant to the terms of which the Custodian is appointed to act as custodian to the
Company.
The Custodian will be entitled to receive a fee of 3 basis points per annum of the value of the
non-real estate assets held on behalf of the Company, subject to a minimum monthly fee of
A1,000, payable quarterly in arrears together with other agreed transaction settlement charges.
The Custodian shall be entitled to receive reimbursement of reasonable out-of-pocket expenses
on an ongoing basis. The agreement contains provisions under which the Company exempts
the Custodian from liability in the absence of fraud, wilful default, bad faith or gross
negligence for any liabilities, obligations, losses, or damages arising out of or in connection
with its performance of its duties under the agreement. Similarly, the Company has agreed to
indemnify the Custodian in respect of losses it may suffer in connection with the performance
of its duties under the agreement save to the extent that such losses are due to fraud, wilful
default, bad faith or negligence on the part of the Custodian. The agreement may be
terminated on not less than 90 days written notice by either party, provided that termination
may be made immediately in certain specified circumstances. The agreement is governed by the
law of the Isle of Man.

6.9

The depositary and custody services agreement dated 6 December 2005 between the Company
and the Depositary. CREST does not provide for the direct holding and settlement of foreign
securities such as shares in the Company. To enable shares in the Company to be indirectly
held and traded through CREST, under the terms of this agreement and a separate deed of
trust, the Depositary agrees to hold securities in the Company and issue depositary interests in
the ratio of one for one for each such security. These depositary interests, representing
securities in the Company, can be held and traded through CREST. The depositary services
provided by the Depositary also include maintaining in the United Kingdom a register of
holders of the depositary interest, issuing the depositary interests in uncertificated form and
other related registry services. The custody services provided by the Depositary also include
executing instructions received from CREST members. Subject to earlier termination in
62

accordance with the agreement, the initial term of the agreement is fixed for 3 years and may
thereafter be terminated by either party on six months notice. Fees payable by the Company
include a start up fee of 8,000, an annual fee of 6,000 payable monthly in arrears and a fee
of 1 per deposit, transfer or cancellation of depositary interests.
7
Working Capital
The Directors are of the opinion, having made due and careful enquiry, that the working capital
available to the Group will be sufficient for its present requirements, that is for at least twelve
months from the date of Admission.
8
Litigation
There are no governmental, legal or arbitration proceedings active, pending or threatened against, or
being brought by, the Company.
9
9.1

General
There are no patents or other intellectual property rights, licences or particular contracts which
are of fundamental importance to the Companys business.

9.2

The costs and expenses of, and incidental to, Admission will be borne by the Company and
will be approximately A4.2 million (2.85 million).

9.3

Mr Papageorghiou is the Managing Partner of A.N. Papageorghiou & Associates which firm
has earned fees from the Company for the provision to the Company of Cypriot law legal
services.

9.4

Axia Ventures Limited (Axia) and Gryphon Central Europe Ltd. (Gryphon) of which Mr
Achilleoudis and Mr Moy are directors respectively have entered into agreements with
Panmure Gordon in relation to the Placing. Pursuant to the terms of these agreements Axia
and Gryphon have agreed to procure investors to take part in the Placing and Panmure
Gordon have agreed to allocate a number of Placing Share at the Placing Price to investors
procured by Axia and Gryphon subject in the case of Axia to a global cap of A10 million and
in the case of Gryphon to a global cap of A20 million. Axia and Gryphon shall receive a
commission of 2.5 per cent. and 1.0 per cent. respectively of the funds raised, in both cases to
be paid out of Panmure Gordons gross Placing commission of 3.5 per cent.

9.5

Save as set out in paragraphs 9.3 and 9.4 above, and except for fees payable to the
professional advisers whose names are set out on pages 5 and 6 of this document and the
Founding Shareholder Warrants issued to the Founding Shareholders as set out in paragraph
6.3 above, no person has received fees, securities in the Company or other benefit to a value of
10,000 (or its currency equivalent) whether directly or indirectly, from the Company within
the 12 months preceding the application for Admission, or has entered into any contractual
arrangement to receive from the Company, directly or indirectly, any such fees, securities or
other benefit on or after Admission.

9.6

On 6 December 2005 the Company issued the Founding Shareholder Warrants to the
Founding Shareholders. Save for the issue of the Founding Shareholder Warrants, there has
been no significant change in the financial or trading position of the Company since 30
September 2005.

9.7

The Company does not have, nor has it had since its incorporation, any employees and does
not own any premises.

9.8

The Directors undertake to propose a resolution for the winding-up of the Company if no
investments have been made within two years of Admission.

9.9

Where information has been sourced from a third party this information has been accurately
produced and as far as the Company is aware and is able to ascertain from the information
published by that third party, no facts have been omitted which would render the reproduced
information inaccurate or misleading.

9.10

The Investment Manager is or may be a promoter of the Company and save as disclosed in
paragraph 6.6 above, no amount or benefit has been paid, or given to the Investment Manager
or any of their subsidiaries since the incorporation of the Company and, save for under the
Founding Shareholder Warrant Instrument, none is intended to be paid, or given.

9.11

The Companys auditors are KPMG of Elma House, 10 Mnasiadou Street, 1065 Nicosia,
Cyprus. KPMG were appointed as auditors to the Company on 5 October 2005 and are
members of the Institute of Certified Public Accountants of Cyprus.
63

9.12

Grant Thornton UK LLP have given and have not withdrawn their written consent to the
issue of this document with the inclusion of their Accountants Report in Part 9 of this
document and the references to such report and to their name in the form and context in
which they appear.

9.13

ERA have given and have not withdrawn their written authorisation and consent to the issue
of this document with the inclusion of their letter in Part 8 of this document and the
references to such report and to their name in the source and context in which they appear.

9.14

The Investment Manager, Grant Thornton Corporate Finance and Panmure Gordon have
given and not withdrawn their written consent to the issue of this document with their names
and the references to them in the form and context in which such references are included.

9.15

The period within which placing participations may be accepted pursuant to the Placing and
arrangements for the payment and holding of subscription monies pending Admission are set
out in the Placing Agreement and in the placing letters sent to prospective placees (the
Placing Letters). The Placing Shares are not being offered generally and no applications have
or will be accepted other than under the terms of the Placing Agreement and the Placing
Letters. All monies received from applicants will be held by Panmure Gordon prior to issue of
the Placing Shares. If the placing agreement does not become unconditional or is terminated,
any monies returned will be sent by cheque crossed A/C Payee in favour of the relevant
placee by first class post at the risk of the addressee within three days of the date of
termination or last date for satisfaction of the Conditons.

10.
Depositary Interests
In summary, the Deed Poll contains, amongst others, provisions to the following effect, which are
binding upon holders of Depositary Interests:
Holders of Depositary Interests warrant, amongst other matters, that Common Shares transferred or
issued to the Depositary or the custodian (on behalf of the Depositary) are free and clear of all liens,
charges, encumbrances or third party interests and that such transfers or issues are not in
contravention of the Companys constitutional documents or any contractual obligation, law or
regulation. Holders of Depositary Interests agree to indemnify Computershare in respect of any costs
or liabilities which it may suffer by reason of any breach of any such warranty.
It should be noted that holders of Depositary Interests may not have the opportunity to exercise all
of the rights and entitlements available to holders of Common Shares including, for example, the
ability to vote on a show of hands. In relation to voting, it will be important for holders of
Depositary Interests to give prompt instructions to the Depositary or its nominated custodian, in
accordance with any voting arrangements made available to them, to vote the underlying Common
Shares on their behalf or, to the extent possible, to take advantage of any arrangements enabling
holders of Depositary Interests to vote such Common Shares as a proxy of the Depositary or its
nominated custodian.
The Depositary will be entitled to cancel Depositary Interests and withdraw the underlying Common
Shares in certain circumstances including where a holder of Depositary Interests has failed to perform
any obligation under the Deed Poll or any other agreement or instrument with respect to the
Depositary Interests.
The Deed Poll contains provisions excluding and limiting the Depositarys liability. For example, the
Depositary shall not be liable to any holder of Depositary Interests or any other person for liabilities
in connection with the performance or non-performance of obligations under the Deed Poll or
otherwise except as may result from its negligence or wilful default or the fraud of any custodian or
agent which is not a member of its group unless it has failed to exercise reasonable care in the
appointment and continued use and supervision of such custodian or agent. Furthermore, except in
the case of personal injury or death, the Depositarys liability to a holder of Depositary Interests will
be limited to the lesser of; (a) the value of the Common Shares and other deposited property
properly attributable to the Depositary Interests to which the liability relates; and (b) that proportion
of 5 million which corresponds to the portion which the amount the Depositary would otherwise be
liable to pay to the holder of Depositary Interests bears to the aggregate of the amounts the
Depositary would otherwise be liable to pay to all such holders in respect of the same act, omission
or event which gave rise to such liability or, if there are no such amounts, 5 million.
The Depositary is entitled to charge fees and expenses for the provision of its services under the Deed
Poll without passing any profit from such fees to holders of Depositary Interests. Each holder of
Depositary Interests is liable to indemnify the Depositary and any custodian (and their agents, officers
and employees) against all costs and liabilities arising from or incurred in connection with, or arising
64

from any act related to, the Deed Poll so far as they relate to the property held for the account of
Depositary Interests held by that holder, other than those resulting from the wilful default, negligence
or fraud of the Depositary, or the custodian or any agent, if such custodian or agent is a member of
the Depositarys group, or, if not being a member of the same group, the Depositary shall have failed
to exercise reasonable care in the appointment and continued use and supervision of such custodian
or agent.
The Depositary may terminate the Deed Poll by giving not less than 90 days prior notice. During
such notice period holders may cancel their Depositary Interests and withdraw their deposited
property and, if any Depositary Interests remain outstanding after the Deed Poll has terminated, the
Depositary must, among other things, deliver the deposited property in respect of the Depositary
Interests to the relevant holders of Depositary Interests or, at its discretion, sell all or part of such
deposited property. It shall, as soon as reasonably practicable, deliver the net proceeds of any such
sale, after deducting any sums due to the Depositary, together with any other cash held by it under
the Deed Poll pro rata to holders of Depositary Interests in respect of their Depositary Interests.
The Depositary may require from any holder, or former or prospective holder of Depositary Interests,
information as to the capacity in which such Depositary Interests are, were, or are to be owned or
held and the identity of any other person with any interest of any kind in such Depositary Interests
or the underlying Common Shares and holders are bound to provide such information requested.
Furthermore, to the extent that, amongst other requirements, the Companys constitutional documents
require disclosure to the Company of, or limitations in relation to, beneficial or other ownership of,
or interests of any kind whatsoever, in the Common Shares, the holders of Depositary Interests are
to comply with such provisions and with the Companys instructions with respect thereto.
11
Availability of Documents
Copies of this document will be available free of charge to the public at the offices of Grant
Thornton Corporate Finance, Grant Thornton House, Melton Street, Euston Square, London NW1
2EP, during normal business hours on any weekday (Saturdays and public holidays excepted) until
the date falling one month after the date of Admission.
Dated:

6 December 2005

65

DEFINITIONS
The following definitions apply throughout this document unless the context requires otherwise:
Administration Agreement

the administration agreement between the Company and the

Administrator, dated 6 December 2005, a summary of which is
set out in paragraph 6.7 of Part 11 of this document

Administrator

Anglo Irish Fund Services Limited

Admission

admission of the entire issued and to be issued common share

capital of the Company to trading on AIM becoming effective in
accordance with the AIM Rules

AIM

the market of that name operated by the London Stock Exchange

AIM Rules

the rules for AIM companies and their nominated advisers

published by the London Stock Exchange (as updated or
amended from time to time)

Articles

the Articles of Association of the Company

Business Day

a day, other than a Saturday or Sunday, on which banks are open

for business in London

BVI

British Virgin Islands

City Code

the City Code on Takeover and Mergers

Colliers International

Colliers International S.A.

Common Shareholders or
Shareholders

registered holders of Common Shares or Depositary Interests, as

the case may be

Common Shares

common shares of A0.01 each in the Company and, save where the
context requires otherwise, Depositary Interests representing such
shares

Company

Dolphin Capital Investors Limited

CREST

the computerised settlement system (being the relevant system as

defined in the Uncertificated Securities Regulations 2001 (S.I 2001/
3755) to facilitate the transfer of title of shares in uncertificated
form operated by CRESTCo Limited

CRESTCo

CRESTCo Limited

Custodian

Anglo Irish Bank Corporation (I.O.M.) P.L.C.

CYP

Cypriot Pounds

Deed Poll

the deed poll dated 21 November 2005 entered into by the

Depositary and which constituted the Depositary Interests

Depositary or Computershare

Computershare Investor Services PLC

Depositary Interests

independent securities to be issued by the Depositary representing

Common Shares which may be held and transferred through the
CREST system

Directors or Board

the directors of the Company including any duly appointed

committee thereof

EU

European Union

Financial Services Authority or

FSA

the Financial Services Authority of the UK

Fortress Investment Group or

Fortress

Fortress Investment Group LLC

Founding Partners

Miltos Kambourides and Pierre Charalambides, the founders of the

Investment Manager

Founding Shareholders

the 13 parties, including the Investment Manager and Fortress, who

in June 2005 subscribed a total of A5 million for Common Shares in
the Company
66

Founding Shareholder Warrants

the warrants to subscribe for Common Shares, subject to the terms

and conditions set out in the Founding Shareholder Warrant
Instrument and issued to the Founding Shareholders

Founding Shareholder Warrant

Instrument

the instrument of the Company dated 6 December 2005

constituting the Founding Shareholder Warrants, a summary of
which is set out in paragraph 6.3 of Part 11 of this document

Grant Thornton Corporate

Finance

the corporate finance division of Grant Thornton UK LLP which is

authorised and regulated by the FSA to carry on investment
business

Group

the Company and its subsidiary undertakings

IBCA

the BVI International Business Companies Act (Cap. 291) 1984

Investment Management
Agreement

the investment management agreement between the Company and

the Investment Manager dated 1 August 2005 (which will be
amended and restated with effect from Admission), a summary of
which is set out in paragraph 6.6 of Part 11 of this document

Investment Manager

Dolphin Capital Partners Limited

Internal Rate of Return or

IRR

with respect to each Project, the total quarterly compounded

internal rate of return to the Company calculated after deduction of
any tax payable by the Company or any subsidiary on its
operations related to the Project and before deduction of any tax
payable by the Company on distributions made to its Shareholders
and any performance fee payable to the Investment Manager
(including sums paid into escrow), taking into account the amount
and timing of all distributions made by the Company to its
Shareholders related to the Project up to and including such date
and all capital contributions made by the Company related to that
Project up to and including such date.
For the purposes of calculating such IRR all capital contributions
by the Company and all distributions to the Shareholders made at
any time during a month shall be deemed to be paid or made on the
first day of such month. All calculations relating to the IRR will be
on an annualised basis and expressed in Euros.

Listing Rules

the listing rules published by the FSA under section 73A of the
Financial Services and Markets Act 2000

London Stock Exchange

London Stock Exchange plc.

Master-planned Leisureintegrated Residential Resort(s),

Residential Resorts or
Project(s)

master-planned residential resort developments which incorporate

a combination of, but not limited to, leisure facilities such as hotels,
golf courses, polo fields, country clubs, spas and marinas

NAV or Net Asset Value

the value of the assets of the Company less its liabilities, determined
in accordance with the accounting principles and valuation
guidelines adopted by the Company from time to time

Net Asset Value per Common

Share

the Net Asset Value divided by the number of Common Shares in

issue from time to time

Panmure Gordon

Panmure Gordon (Broking) Limited

Placing

means the conditional placing by Panmure Gordon as described in

this document

Placing Agreement

the conditional placing agreement dated 6 December 2005 and

entered into between the Company, the Directors, the Investment
Manager, Panmure Gordon and Grant Thornton Corporate
Finance, a summary of which is set out in paragraph 6.1 of Part
11 of this document

Placing Price

68 pence (A1.00) per Common Share

Placing Shares

the 104,000,000 new Common Shares to be placed with investors

pursuant to the Placing
67

Property Valuer

the expert retained by the Company from time to time to provide

Property and/or property related asset valuation services, currently
being Colliers International

Prospective Investment Portfolio

the identified Projects in respect of which the Company, is currently

negotiating a participation, as described in Part 4 of this document

Region or Southeast Europe

Greece, Cyprus, Turkey and Croatia

Registrar

Computershare Investor Services (Channel Islands) Limited

Shareholder

a holder of Common Shares

UK or United Kingdom

the United Kingdom of Great Britain and Northern Ireland

US or USA or United
States

the United States of America (including the States thereof and the
District of Columbia), its territories and possessions

In this document, unless otherwise specified, all references to pounds or are to United
Kingdom pounds sterling, all references to dollars or $ are to US dollars and all references to
Euro or A are to the unit of money used in all European Union countries which have adopted
the single European currency unit.

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