ROMLAND PROP INVEST

Property Investment Fund

Date: 30.01.2004

Prepared: By Gian Sharp

Contact: giansharp@yahoo.co.uk

Table of Contents

Page 3 Personal Note

Page 4 Executive Summary

Page 5 Investment Enviroment

Page 5 The Current Market & Short Term Future

Page 6 Areas Of Existing Corporate Investment

Page 7 Company Set Up

Page 8 Investor Options

Page 8 Risk

Page 8 Next Steps & Timings

Personal Note

All of you who have known me for some time know that I have for a long time both followed and invested in the property market. Having lived in Romania for the past two years I can safely say that this country in terms of land and property investment is going to grow at rates we will not see again in many years.

Over the past twelve months the market has moved in differing segments up from 20 % – 40 % from a very low base. This as any professional in this market will tell you is the start of a long bull run up to and past EU entry.

I have never seen the opportunities offered in this market since the early nineties in London and have been investing in land and property in Romania for past eighteen months.

I have talked to many of you and in every conversation I have had we have all concluded that setting up a fund would be a great opportunity.

I have now done this it is up to you now to read through the facts and take your choice. I have never felt easy about mixing money and friends and would like to stress that this is strictly business. It has opportunity but it carries risk. Do not put your shirt on this but put in something you want to grow but can afford to sit on for a minimum of three years.

I am not doing this for free, the advisory board and myself will take a self-funding 15 % profit from any sales in land or property. That fee buys us all the best advise I see available in this market and my commitment.

If I leave this market then the fund would be solely managed by Colliers International at the prevailing fee at that time, making it a save investment from a management perspective.

I have invested in a prime three thousand three hundred square meter plot of land, which currently has planning on for a thirty three-bedroom hotel and restaurant. The land is placed in a hilltop over looking the old part of the medieval city of Brasov. It is six kilometers away from Romania’s top ski resort of Poina Brasov. I will be developing this land into a minimum of four chalets split into four duplex apartments.

I will be putting half of this land which is currently valued at thirty five to forty Euros per square meter in the fund. Conservatively that puts my investment in at fifty thousand Euros (five shares). The other half will be purchased by the fund at fifty thousand Euros

Executive Summary

Romland Prop Invest SRL, a registered company established in Bucharest, Romania has been established with the sole purpose of managing an investment fund comprising of land and subsequent real estate ventures within the Romanian market.

Romland Prop Invest SRL will be 100 % owned by a United States based offshore company (Romland Prop Invest Ltd) this company comprise of the shareholders in this fund.

Romland Prop Invest Ltd is offering a limited number of share options in the company for a minimum investment of 10,000 Euro. Each share will be worth 10,000 Euro at the start up stage.

The target is to have a group of investor / shareholders and to generate between EUR 500k & EUR 1 million as an initial foundation fund.

The residential market in Romania is on the upward swing. The accession to NATO and the upcoming incorporation into the European Union will provide undoubted stimulus. We will manage the investment in such a way that with a minimum investment of EUR10k, we have conservatively forecast growth of 120% over a 5-year term. Furthermore this growth does not factor the property value appreciation, as demand grows closer to EU accession.

Fifty percent of the fund will initially focus on building up a land bank in differing segments:

• Central Bucharest for Residential / Commercial / Development

• Industrial zones around the Bucharest Ring Road for Warehouse Development

• Strategic Land acquisition along the new European Highway

• Land in and around the top ski areas in Romania for chalet/apartment development

Twenty five percent of the fund will be aimed at the affordable housing segment in Bucharest, which is between 25,000 – 45,000 Euros per apartment. These apartments will be refurbished – rented for the five-year term of the fund then the shareholders will take a decision on what to do with them.

Twenty five percent together with an element of gearing will go towards development of the land acquisitions built up over 2004.

The land capital appreciation will come mainly through selecting one project / developing / renting / then selling or developing and selling. Once each project is complete the profits are reinvested for the next development until the five-year duration terminates. At this point the shareholders will take a decision on what to do with the assets of the fund.

Investment Environment

See attached latest EIU , Price Waterhouse Coopers, Colliers Forecasts.

The Current Market and Short Term Future

Key reasons for investing into Romania, as quoted by the Romanian Ministry of Development & Prognosis are:

• Strategic location in Europe at the cross roads of traditional commercial corridors which gives easy reach to 240 million people within a radius of 1000kms.
• A market of 22.5 million people, the 2nd largest in Central Europe
• Free access to all economic sectors
• Substantial industrial history and background
• Well educated and relatively cheap labour
• Excellent language skills
• International Trade relations
• Free Trade Agreement with the European Free Trade Association (EFTA)
• “Most Favored Nation” status in the trade relations with the United States (MFN)
• Central European Free Trade Agreement (CEFTA)

Investors into the cross roads of an expanding Europe will need somewhere to locate their business and their employees.

In addition and recently the market economy and international credit ratings have improved, enhancing the attractiveness of the Romanian market.

Further reference to the market economy can be seen in a report from Price Waterhouse Coopers plc, Romanian Country Report, published on their web site http://pwcglobal.com/ro/eng/ins-sol/survey-rep/pwc_countryoverview_october2002.pdf, http://pwcglobal.com/ro/eng/main/home/pwc_bguide_2004.pdf.
In addition Colliers International who publishes market reports for all real estate sectors:
http://www.colliers.com/Markets/Bucharest/MarketReports/

The Romanian market finds itself in a fast developing economy; accession to NATO in 2002 and the expected entry into the European Union in 2007 are key factors, which are influencing the Romanian economy as a whole.

As the economy improves, currently attracting $1.8 billion of Foreign Investment annually, it encourages a consumer market and with the introduction of credit and more importantly mortgage products in 2003, the property is suddenly becoming affordable to the average man in the street and not just to the wealthy.

In addition to the banking services coming on stream there are some significant international investors entering the market and some money has been set aside from the European Bank of Reconstruction and Development for future home buyers. From a review of the local business papers over the last 6 months, there is over $320 million identifiable new money for loans in property acquisition.

Quoting from a report in Bucharest Business Week, 27th January – 2nd February, “according to recent studies 92% of the Romanian population wants a new home, of whom 98% want to own it”.

A broker with Colliers International Romania commenting on the market status in the coming years stated: “There’ll be a boost in sales while the supply will grow slightly owing to the residential units deliverable this year”

In a report from the Estates & Construction Market section of the Business Review magazine, November 11th – 17th 2002, a prominent agent in the Bucharest market is predicting an increase in the land prices.

The current plans for developers with significant investments sits around $730 million and this figure by no means covers the developments in the planning stage and those who are constructing smaller new apartment developments. One of the larger plans, currently in planning is a $600 million development of apartments and houses. See appendix for summary of market activity.

All of these developments are new. In addition to this new supply one has to consider the supply chain, the continuing ease for Romanians to own their own homes and those with the resources to purchase the new developments at the top end of the market. This stimulus will create a demand for property over the next 5 years and strong growth is anticipated by the developers and agents.

The Romanian property market is one of the most dynamic in the region. As Western manufacturers seek cost advantages offered by the area, the requirement for commercial / residential and industrial real estate has grown significantly. Within Bucharest in particular, there is an increasing demand for large-scale logistics, warehousing, wholesale / retail and manufacture facilities on the outskirts of the city.

Areas of existing corporate investment:

• Automobile and automotive component industry (Renault, Daewoo, Siemens, Daimler Benz).

• Banking and finance (Citibank, Société Générale, ABN Amro Bank, AIG, ING Barings, Hypovereinsbank, Volksbank, Raiffeisen)

• Telecommunications (Qualcomm, France Telecom, OTE, Telesystem International Wireless Services, Airtouch-Vodafone)

• IT (companies include HP, IBM, Motorola, Cisco, Lockheed Martin)

• Commercial construction and development (Bouygues, Strabag)

• Hotels (Hilton, Marriott, Holiday Inn, Best Western)

• Consumer products and Packaging Activity (Procter and Gamble,Unilever, GSK, Henkel, Colgate Palmolive, Kraft, Coca Cola,Pepsi, Dunkin Donuts)

• Retail (Carrefour, Cora, Metro, Selgros, XXL).

Bucharest shows the highest forecast compound growth of any European city compared to Western Europe, Central & Eastern Europe. As whole have above an average GDP Growth.

Bucharest is expected to grow at a compound 7.7% over the next ten years, Budapest by 5.6%, Sofia and Prague by 4.5%, and Warsaw by 4.4%. By contrast, the fastest growing city in the West, London, is expected to grow by just over 3%.

Romania is the second largest market within Central and Eastern Europe (CEE). The CEE encompass a total population of 128 million of this, Romania is the second largest market at over 22 million. Bucharest and its immediate environs is the main economic driver of the country, accounting for the vast majority of the GDP and disposable consumer income.

Romania has the 2 nd largest port in Europe, around a half days drive from Bucharest – Constanta (230km from Bucharest) is the largest port in the Black Sea and the second largest in Europe, with a number a new services (including LPG, grain, and container terminals) becoming operational over the past decade.

Pan continental European surveys indicate that Romania and Poland are anticipated to most greatly benefit from European Enlargement.
Business sectors / activities that are forecast to significantly benefit include distribution and logistics and technology.
Highly Educated Labour Force, Increasing Productivity and Stable Wage Costs.

The Company Set up

The property portfolio will be acquired in the name of Romland Prop Invest SRL, as land acquisition legally has to be with a Romanian entity. Gian Sharp is the managing director and sole director of this company. This will allow speed and efficiency in acquiring land and property. The company along with all trading activities will audited annually by PWC accountants. All transactions will be posted on the company internet site with relating financial documentation.

The company will solely owned by the offshore company established by the investors in the fund.

The advice on acquisition / development and management of the portfolio will be carried out by a body comprising of experts from colliers international / the ministry of transportation / Bogart construction for development. This body will charge on a self funding commission only basis of 15 % of the profit on any sale of land or property.

The profits from each project will be re-invested and the cycle repeated through the five year cycle for the investor. At the end of 5 years an assessment will be made and options to take the term dividend, or withdraw original amount invested plus dividend, or extend the investment for a further term.

No annual dividends will be paid from this investment, the growth projected is calculated on the assumption of a 5 year term. Therefore your initial investment is effectively locked in for this period. Due to the early withdrawal may be considered only after three years, but would involve an early withdrawal penalty of 5% of investment value.

Investor Options

This investment opportunity is designed for small individual investors with an option to invest EUR 10k or multiples of 10k upwards in a new and exciting business venture. The advantage of a group of investors is that the company can acquire a portfolio of real estate spreading the risk and providing optimum returns.

The cost of entry into this venture is 3.0 %. This cost will cover company set up costs and any surplus will be put against future costs / accounting fees etc.

Audit costs and any additional costs (legal / company maintenance costs etc) will be charged directly to the fund. This is transparent and effective.

Risks

Of course no investment in real estate is 100% guaranteed, however all the key economic and market factors are very favorable, economical stability, political stability, NATO & EU accession, improved international credit rating. Clearly our success will be governed by both the Romanian economy and to a lesser extent the global economy. Whilst all data gathered and shown indicates great growth potential, it remains a forecast and our investment is aimed at increasing capital in line with the opportunities and risks which prevail in the market.

Next Steps and Timings

Expression of interest with investment amount to be sent Gian Sharp at the yahoo address stated by 10.02.2004

Confirmation of commitment by 20.02.2004 and subsequesent company formation up to 01.03.2004.

Funds required by 15.03.2004