Dubai Holding Commercial Operations MTN Limitedfeeds.nasdaqdubai.com/resources/2008/3/11/501672b4-0c6a...Prospectus Dubai Holding Commercial Operations MTN Limited (incorporated with

Prospectus

Dubai Holding Commercial Operations MTN Limited(incorporated with limited liability in the Cayman Islands)

U.S.$5,000,000,000 Debt Issuance Programme

unconditionally and irrevocably guaranteed as to payment of principal and interest by

Dubai Holding Commercial Operations Group LLC(incorporated with limited liability in Dubai)

This Prospectus has been prepared for the purpose of giving information with regard to the issue of notes (“Notes”)issued under a debt issuance programme (the “Programme”) of Dubai Holding Commercial Operations MTNLimited (the “Issuer”) described in this Prospectus during the period of 12 months after the date hereof.

Application has been made for such Notes to be admitted during the period of 12 months after the date hereof tolisting on the Dubai International Financial Exchange (“DIFX”). Notes which are admitted to trading or listed on anexchange may subsequently be de-listed, as described in “General Information”. Notes may also be issued under theProgramme which are admitted to trading or listed on a stock exchange other than the DIFX. The Programme alsopermits Notes to be issued on the basis that they will not be admitted to listing, trading and/or quotation by anycompetent authority, stock exchange or quotation system.

The DIFX takes no responsibility for the contents of this document, makes no representation as to its accuracy orcompleteness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance uponany part of the contents of this document. Notes may only be offered in minimum denominations of at least¤50,000 (or its equivalent in another currency) and as such will qualify as Restricted Securities within the meaning ofthe Listing Rules of the DIFX. Any sale or transfer of Notes after the date of issuance of such Notes may only bemade in minimum denominations of ¤50,000 (or its equivalent in another currency).

Dubai Holding Commercial Operations Group LLC (the “Company” or the “Guarantor”) will unconditionally andirrevocably guarantee on an unsecured basis all of the Issuer’s obligations pursuant to the Notes issued under theProgramme.

The Programme has been rated A1 by Moody's Investors Service Limited (“Moody’s”), A+ by Standard & Poor’sRating Services, a division of The McGraw - Hill Companies, Inc. (“S&P”) and AA- by Fitch Ratings Ltd. (“Fitch”).Tranches (as defined herein) of Notes to be issued under the Programme may be rated or unrated. Where a Trancheof Notes is to be rated, the rating(s) will not necessarily be the same as the relevant rating(s) assigned to theProgramme. A security rating is not a recommendation to buy, sell or hold securities and may be subject tosuspension, reduction or withdrawal at any time by the assigning rating agency.

The Notes have not been, and will not be, registered under the United States Securities Act of 1933, as amended(the “Securities Act”). The Notes will be issued only in bearer form and Notes having a maturity of more than oneyear are subject to United States tax law requirements. The Notes may not be offered, sold or delivered within theUnited States or to, or for the account or benefit of, U.S. persons, subject to certain exceptions.

Each Series (as defined herein) of Notes will initially be represented on issue by a temporary global note in bearerform (each a “Temporary Global Note”) or a permanent global note in bearer form (each a “Permanent GlobalNote” and together with the Temporary Global Note, the “Global Notes”). Global Notes may be deposited on theissue date with a common depositary on behalf of Euroclear Bank S.A./N.V. (“Euroclear”) and Clearstream Banking,société anonyme (“Clearstream, Luxembourg”). The provisions governing the exchange of interests in GlobalNotes for other Global Notes and definitive notes are described in “Summary of Provisions Relating to the NotesWhile in Global Form”.

Investing in the Notes involves risk. See “Risk Factors” beginning on page 10 of this Prospectus.

Arranger

JPMorgan

Dealers

ABN AMRO Barclays CapitalBNP PARIBAS CitigroupDresdner Kleinwort Emirates Bank InternationalHSBC JPMorganMashreqbank Standard Chartered Bank

The Royal Bank of Scotland

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In this Prospectus, the terms the “Company” and the “Guarantor” refer to Dubai HoldingCommercial Operations Group LLC. References to the “Issuer” are to Dubai Holding CommercialOperations MTN Limited.

The Guarantor accepts responsibility for the information contained in this Prospectus and declaresthat, having taken all reasonable care to ensure that such is the case, the information contained inthis Prospectus is, to the best of its knowledge, in accordance with the facts and contains noomission likely to affect its import. The Issuer and the Guarantor, having made all reasonableenquiries, have confirmed to the Dealers named under “Subscription and Sale” below that as of thedate of this Prospectus, this Prospectus contains all information that is material in the context of theissue and offering of the Notes; that such information is true and accurate in all material respectsand is not misleading in any material respect; that any opinions, predictions or intentions expressedherein are honestly held or made and are not misleading in any material respect; that all properinquiries have been made to ascertain and to verify the foregoing; and that this Prospectus does notcontain any untrue statement of a material fact or fail to state a material fact necessary in order tomake the statements herein, in the light of the circumstances under which they are made, notmisleading.

Each Tranche of Notes will be issued on the terms set out herein under “Terms and Conditions ofthe Notes” (the “Conditions”) as amended and/or supplemented by a document specific to suchTranche called final terms (the “Final Terms”). This Prospectus must be read and construedtogether with any amendments or supplements hereto and with any information incorporated byreference herein and, in relation to any Tranche of Notes which is the subject of Final Terms, mustbe read and construed together with the relevant Final Terms.

No person has been authorised to give any information or make any representation regarding theIssuer, the Guarantor, the Programme or the Notes other than as contained in this Prospectus. Anysuch representation or information should not be relied upon as having been authorised by theIssuer, the Guarantor, the Dealers, the Trustee (as defined herein) or any of the respective affiliatesof the Issuer, the Guarantor, the Dealers or the Trustee. Neither the delivery of this Prospectus, northe offering, sale or delivery of any Notes shall under any circumstances imply that there has beenno change in the business, results of operations, financial condition or prospects of the Issuer or theGuarantor since the date of this Prospectus.

Neither the Trustee nor any Dealer makes any representation or warranty, expressed or implied, andaccepts no responsibility, as to the accuracy or completeness of the information contained in thisProspectus. Nothing contained in this Prospectus is, nor should prospective investors rely uponanything as, a promise or representation by the Dealers or the Trustee as to the past or the future.By accepting delivery of this Prospectus, prospective investors agree to the foregoing.

The distribution of this Prospectus and the offering, sale and delivery of the Notes in certainjurisdictions is restricted by law. Each of the Issuer, the Guarantor, the Dealers and the Trusteerequires that any prospective investors and anyone who receives this Prospectus inform themselvesabout and observe such restrictions. This Prospectus does not constitute, and may not be used foror in connection with, any offer to, or solicitation by, anyone in any jurisdiction in which, or to or byany person whom, such offer or solicitation would be unlawful.

The Notes will be subject to restrictions on resale and transfer as described under “Subscription andSale”. In particular, Notes have not been and will not be registered under the Securities Act, andNotes having a maturity of more than one year are subject to United States tax law requirements.Subject to certain exceptions, Notes may not be offered, sold or delivered within the United Statesor to U.S. persons.

Neither this Prospectus nor any Final Terms constitutes an offer or an invitation to subscribe for orpurchase any Notes and should not be considered as a recommendation by the Issuer, theGuarantor, the Dealer, the Trustee or any of them that any recipient of this Prospectus or any FinalTerms should subscribe for or purchase any Notes. Each recipient of this Prospectus or any Final

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Terms shall be taken to have made its own investigation and appraisal of the condition (financial orotherwise) of the Issuer and the Guarantor.

The maximum aggregate principal amount of Notes outstanding and guaranteed at any one timeunder the Programme will not exceed U.S.$5,000,000,000 (and for this purpose, any Notesdenominated in another currency shall be translated into U.S.$ at the date of the agreement toissue such Notes (calculated in accordance with the provisions of the Programme Agreement asdefined under “Subscription and Sale”)). The maximum aggregate principal amount of Notes whichmay be outstanding and guaranteed at any one time under the Programme may be increased fromtime to time, subject to compliance with the relevant provisions of the Programme Agreement.

Forward-looking Statements

Some statements in this Prospectus may be deemed to be “forward-looking statements”. Forward-looking statements include statements concerning the Issuer’s, the Guarantor’s and each of theGuarantor’s subsidiaries’ plans, objectives, goals, strategies and future operations and performance,and the assumptions underlying these forward-looking statements. When used in this document,the words “anticipates”, “estimates”, “expects”, “believes”, “intends”, “plans”, “aims”, “seeks”,“may”, “will”, “should” and any similar expressions generally identify forward-looking statements.These forward-looking statements are contained in “Risk Factors”, “The Issuer” and “TheCompany” and other sections of this document. The Issuer and the Guarantor have based theseforward-looking statements on the current views of the Guarantor’s management with respect tofuture events and financial performance. Although the Issuer and the Guarantor believe that theexpectations, estimates and projections reflected in such forward-looking statements are reasonable,if one or more of the risks or uncertainties materialise, including those which the Issuer or theGuarantor has identified in this Prospectus, or if any of the Issuer’s or the Guarantor’s underlyingassumptions prove to be incomplete or inaccurate, the Issuer’s or the Guarantor’s actual results ofoperations may vary from those expected, estimated or predicted.

These forward-looking statements speak only as at the date of this Prospectus. Without prejudice toany requirements under applicable laws and regulations, each of the Guarantor and the Issuerexpressly disclaims any obligation or undertaking to disseminate after the date of this Prospectusany updates or revisions to any forward-looking statements contained herein to reflect any changein expectations or any change in events, conditions or circumstances on which any such forward-looking statement is based.

Certain Publicly Available Information

Certain statistical data and other information appearing in the “Overview of the United ArabEmirates and Dubai” section in this Prospectus have been extracted from public sources. None ofthe Issuer, the Guarantor, the Dealers or the Trustee accept responsibility for the factual correctnessof any such statistics or information but each of the Issuer and the Guarantor accepts responsibilityfor accurately extracting and transcribing such statistics and information and believes, after dueinquiry, that such statistics and information represent the most current publicly available statisticsand information from such sources at the dates and for the periods with respect to which they havebeen presented.

In this Prospectus all references to “AED” and “UAE dirham” are to the currency of the UnitedArab Emirates (“UAE”), all references to “¤”, “Euro” and “euro” are to the single currency of theparticipating member states in the Third Stage of the European Economic and Monetary Union ofthe Treaty Establishing the European Community, as amended from time to time, all references to“U.S.$” and “U.S. dollar” are to the currency of the United States of America and all references to“Sterling” and “£” are to the currency of the United Kingdom. References to a “Member State”are references to a member state of the European Economic Area.

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The UAE dirham has been officially pegged to the U.S. dollar since 22 November 1980. The mid-point between the official buying and selling price for the UAE dirham is maintained at a fixed rateof AED 3.67 = U.S.$1.00.

Presentation of Financial Information

The financial information set out on pages F-1 to F-55 of this Prospectus has been derived from thecombined audited financial statements of Dubai Holding Commercial Operations Group LLC for theyear ended 31 December 2005.

Supplemental Prospectus

Each of the Issuer and the Guarantor has given an undertaking to the Dealers that if at any timeduring the duration of the Programme a significant new matter or inaccuracy arises relating to theinformation included in the Prospectus or there is a significant change affecting any matterdisclosed in the Prospectus, in each case which is capable of affecting an assessment by investors ofthe assets and liabilities, financial position, profits and losses, and prospects of the Issuer and/or theGuarantor and/or of the nature of, and the rights attaching to, the Notes and/or the Guarantee (asdefined herein), each of the Issuer and the Guarantor shall prepare an amendment or supplementto this Prospectus or publish a replacement Prospectus for use in connection with any subsequentoffering of the Notes.

In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) namedas the Stabilising Manager(s) (or any person acting on behalf of any Stabilising Manager(s))in the applicable Final Terms may over–allot Notes or effect transactions with a view tosupporting the market price of the Notes at a level higher than that which might otherwiseprevail. However, there is no assurance that the Stabilising Manager(s) (or any personacting on behalf of a Stabilising Manager) will undertake stabilisation action. Anystabilisation action may begin on or after the date on which adequate public disclosure ofthe terms of the offer of the relevant Tranche of Notes is made and, if begun, may beended at any time, but it must end no later than the earlier of 30 days after the issue dateof the relevant Tranche of Notes and 60 days after the date of the allotment of therelevant Tranche of Notes.

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Contents

Page

General Description of the Programme............................................................................ 6

Risk Factors...................................................................................................................... 10

Terms and Conditions of the Notes ................................................................................ 19

Summary of Provisions Relating to the Notes while in Global Form.................................. 40

Use of Proceeds .............................................................................................................. 44

The Issuer ........................................................................................................................ 45

The Company .................................................................................................................. 46

Overview of the United Arab Emirates and Dubai ............................................................ 65

Taxation .......................................................................................................................... 67

Subscription and Sale ...................................................................................................... 69

Form of Final Terms ........................................................................................................ 72

General Information ........................................................................................................ 82

Index to the Combined Financial Statements .................................................................. F-1

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General Description of the Programme

The following description does not purport to be complete and is qualified in its entirety byreference to, and must be read in conjunction with, the detailed information appearing elsewhere inthis Prospectus and, in relation to the terms and conditions of any particular Tranche of Notes, theapplicable Final Terms. Potential investors should read this entire Prospectus, especially the risksdiscussed under “Risk Factors”.

Words and expressions defined in the “Terms and Conditions of the Notes” below or elsewhere inthis Prospectus have the same meaning in this description.

Issuer ................................................ Dubai Holding Commercial Operations MTN Limited

Guarantor .......................................... Dubai Holding Commercial Operations Group LLC

Initial Programme Amount ................ Up to U.S.$5,000,000,000 (or its equivalent in othercurrencies at the date of issue) aggregate principal amountof Notes outstanding at any one time.

Arranger ............................................ J.P. Morgan Securities Ltd.

Dealers .............................................. ABN AMRO Bank N.V.Barclays Bank PLCBNP PARIBASCitigroup Global Markets LimitedDresdner Bank AktiengesellschaftEmirates Bank International PJSCHSBC Bank Middle East LimitedJ.P. Morgan Securities Ltd.Mashreqbank pscStandard Chartered BankThe Royal Bank of Scotland plc

The Issuer may from time to time terminate theappointment of any dealer under the Programme orappoint additional dealers either in respect of one or moreTranches or in respect of the whole Programme.References in this Prospectus to “Permanent Dealers” areto the persons listed above as Dealers and to suchadditional persons that are appointed as dealers in respectof the whole Programme (and whose appointment has notbeen terminated) and references to “Dealers” are to allPermanent Dealers and all persons appointed as a dealer inrespect of one or more Tranches.

Trustee .............................................. HSBC Trustee (C.I.) Limited

Issuing and Paying Agent .................. HSBC Bank plc

Clearing systems ................................ Euroclear, Clearstream, Luxembourg and/or in relation toany Tranche of Notes, any other clearing system as may bespecified in the relevant Final Terms.

Issuance in Series .............................. The Notes will be issued on a syndicated or non-syndicatedbasis. Notes will be issued in Series. Each Series maycomprise one or more Tranches issued on different issuedates. The Notes of each Series will be subject to identicalterms, except that the issue date and the amount of the

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first payment of interest may be different in respect ofdifferent Tranches. The Notes of each Tranche will besubject to identical terms except that a Tranche maycomprise Notes of different denominations.

Forms of Notes .................................. Notes may only be issued in bearer form. Each Tranche ofNotes will initially be in the form of either a TemporaryGlobal Note or a Permanent Global Note, in each case asspecified in the relevant Final Terms. Each Global Note willbe deposited on or around the relevant issue date with adepositary or common depositary for Euroclear and/orClearstream, Luxembourg and/or any other clearing system.Each Temporary Global Note will be exchangeable for aPermanent Global Note or, if so specified in the relevantFinal Terms, for Definitive Notes. If the TEFRA D Rules arespecified in the relevant Final Terms as applicable,certification as to non-U.S. beneficial ownership will be acondition precedent to any exchange of an interest in aTemporary Global Note or receipt of any payment ofinterest in respect of a Temporary Global Note. EachPermanent Global Note will be exchangeable for DefinitiveNotes in accordance with its terms. Definitive Notes will, ifinterest-bearing, have Coupons attached and, ifappropriate, a Talon for further Coupons.

Currencies.......................................... Notes may be denominated in any currency or currencies,subject to compliance with all applicable legal and/orregulatory and/or central bank requirements. Payments inrespect of Notes may, subject to such compliance, be madein and/or linked to any currency or currencies other thanthe currency in which such Notes are denominated.

Denominations .................................. No Notes may be issued under the Programme which havea minimum specified denomination of less than ¤50,000(or its equivalent in another currency). Subject thereto,Notes will be issued in such denominations as may bespecified in the relevant Final Terms, subject to compliancewith all applicable legal and/or regulatory and/or centralbank requirements.

Maturities .......................................... Any maturity subject, in relation to specific currencies, tocompliance with all applicable legal and/or regulatoryand/or central bank requirements.

Where Notes have a maturity of less than one year andeither (a) the issue proceeds are received by the Issuer inthe United Kingdom or (b) the activity of issuing the Notesis carried on from an establishment maintained by theIssuer in the United Kingdom, such Notes must: (i) have aminimum redemption value of £100,000 (or its equivalentin other currencies) and be issued only to persons whoseordinary activities involve them in acquiring, holding,managing or disposing of investments (as principal oragent) for the purposes of their businesses or who it isreasonable to expect will acquire, hold, manage or disposeof investments (as principal or agent) for the purposes of

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their businesses; or (ii) be issued in other circumstanceswhich do not constitute a contravention of section 19 ofthe UK Financial Services and Markets Act 2000 (the“FSMA”) by the Issuer.

Issue Price .......................................... Notes may be issued at any price and either on a fully orpartly paid basis, as specified in the relevant Final Terms.The price and amount of Notes to be issued under theProgramme will be determined by the Issuer, the Guarantorand the relevant Dealer(s) at the time of issue inaccordance with prevailing market conditions.

Status ................................................ The Notes will constitute unsubordinated and (subject tothe provisions of the “Negative Pledge” below) unsecuredobligations of the Issuer as described in “Terms andConditions of the Notes – Guarantee and Status”.

Status of the Guarantee .................... Notes will be unconditionally and irrevocably guaranteed bythe Guarantor on an unsubordinated basis.

Redemption ...................................... Notes may be redeemable at par or at such other FinalRedemption Amount (detailed in a formula, index orotherwise) as may be specified in the relevant Final Terms.

Redemption by Instalments ................ The Final Terms issued in respect of each issue of Notesthat are redeemable in two or more instalments will set outthe dates on which, and the amounts in which, such Notesmay be redeemed.

Optional Redemption ........................ The Final Terms issued in respect of each issue of Notes willstate whether such Notes may be redeemed prior to theirstated maturity at the option of the Issuer (either in wholeor in part) and/or the holders, and if so the termsapplicable to such redemption provided that, if a Changeof Control Event occurs (see “Change of Control” below),the Issuer shall, at the option of the holder of such Note,upon the holder of such Note giving notice to the Issuer atany time during the Redemption Period, redeem such Noteon the Redemption Date at its principal amount (or suchother amount as may be specified in the relevant FinalTerms) together with interest accrued to the date fixed forredemption (as described in “Terms and Conditions of theNotes – Redemption, Purchase and Options”).

Early Redemption .............................. Except as described in “Optional Redemption” above, earlyredemption will only be permitted for tax reasons asdescribed in “Terms and Conditions of the Notes –Redemption, Purchase and Options”.

Change of Control ............................ The Notes may be redeemed at the option of the holdersof the Notes if at any time His Highness SheikhMohammed Bin Rashid Al Maktoum or his heirs cease(s) toown, directly or indirectly, or otherwise control at least50% of the issued share capital of the Guarantor.

Interest .............................................. Notes may be interest-bearing or non-interest bearing.Interest (if any) may accrue at a fixed rate or a floating rateor other variable rate or be index-linked and the method of

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calculating interest may vary between the issue date andthe maturity date of the relevant Series.

Zero Coupon Notes............................ Zero Coupon Notes may be issued at their principalamount or at a discount to it and will not bear interest.

Negative Pledge ................................ The Notes will have the benefit of a negative pledge asdescribed in “Terms and Conditions of the Notes –Negative Pledge”.

Cross Default .................................... The Notes will have the benefit of a cross default provisionas described in “Terms and Conditions of the Notes –Events of Default”.

Taxation ............................................ All payments in respect of Notes will be made withoutwithholding or deduction for, or on account of taxesimposed or levied by the Cayman Islands or the UAE or anyEmirate therein (or any political subdivision or authoritythereof having the authority to tax), unless the withholdingor deduction is required by law.

Governing Law .................................. The Notes will be governed by and construed inaccordance with English law. See also “Risk Factors – UAElaw and courts and the enforcement of foreign judgmentsin the Emirate of Dubai” below.

Listing ................................................ Application will be made to list the Notes on the DubaiInternational Financial Exchange or as specified in therelevant Final Terms. As specified in the relevant FinalTerms, a Series of Notes may also be unlisted.

Enforcement of Notes in Global Form In the case of Global Notes, individual investors’ rightsagainst the Issuer will be governed by a trust deed dated23 January 2007 (the “Trust Deed”), a copy of which willbe available for inspection at the specified offices of thePaying Agents and at the principal office of the Trustee.

Ratings .............................................. The Programme has been rated A1 by Moody’s, A+ by S&Pand AA- by Fitch. Tranches of Notes to be issued under theProgramme may be rated or unrated. Where a Tranche ofNotes is to be rated, the rating(s) will not necessarily be thesame as the relevant rating(s) assigned to the Programme.A security rating is not a recommendation to buy, sell orhold securities and may be subject to suspension, reductionor withdrawal at any time by the assigning rating agency.

Selling Restrictions ............................ For a description of certain restrictions on offers, sales anddeliveries of Notes and on the distribution of offeringmaterial in the United States, the United Kingdom, theUAE, the Cayman Islands, the Republic of Italy and theNetherlands and such other restrictions as may be requiredin connection with a particular issue of Notes, see“Subscription and Sale” below.

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Risk Factors

Prospective investors should read this entire Prospectus. Words and expressions defined in the“Terms and Conditions of the Notes” or elsewhere in this Prospectus have the same meaningswhen used in this section. Investing in the Notes involves certain risks which are described below.However, the risks described below are not exhaustive and other considerations, some of whichmay not be presently known to the Issuer or the Company, may impact on any investment in theNotes.

Risks Relating to the Issuer

The Issuer is a newly formed entity and has no operating history. It has no subsidiaries nor anysignificant business other than the issuance of the Notes and is not expected to have any incomeexcept payments received from the Company, which will be the only material sources of fundsavailable to meet the claims of the holders of the Notes. Therefore, the Issuer is subject to the samerisks relating to the Company to the extent that such risks could limit the Company’s ability tosatisfy its obligations as guarantor of the Notes.

Risks Relating to the Company

General

The Company is a limited liability company owned as to 99.67% by Dubai Holding LLC. However,the ability of the Company to satisfy its obligations as guarantor of the Notes under the Programmeis solely dependent upon the Company’s financial condition, its revenues and results of operations.

Dependency of the Company on businesses of its subsidiaries

The Company is a holding company and as such is dependent on the operations, revenues and cashflows generated by its subsidiaries. The Company’s subsidiaries are involved in a diverse range ofbusinesses and operations and are subject to differing risks and challenges, largely depending onthe industries in which they operate. Those businesses are currently broadly divided between twomain sectors, real estate development and hospitality and leisure. The Company is subject to therisks faced by the real estate development and hospitality and leisure industries in general (both inDubai and in other countries in which its subsidiaries operate) as well as specific risks affecting theprojects or assets of its subsidiaries.

Economic and political risks may have a negative impact on the hospitality and leisure andreal estate industry in Dubai

The Company derives a significant portion of its revenues from the Jumeirah Group (see “TheCompany – Jumeirah Group LLC”) which both owns and manages hotels in Dubai and overseas.The “Jumeirah” brand has become synonymous with quality and luxury and its hotels (both thoseowned and managed as well as those which it only manages) have achieved consistently highoccupancy rates.

There has also been a high demand for residential and commercial property in Dubai over the lastfew years largely due to its strong economic growth which can be attributed to Dubai’s success as abusiness, tourist and lifestyle destination as well its ability to provide a stable and secure base inwhich foreign companies can set up and from which they can run their regional operations.

Although the UAE has enjoyed relative peace and stability, any economic or political instability tothe region may have an adverse effect on tourism and travel and thereby cause a decline inoccupancy rates resulting in a decline in the Jumeirah Group’s revenues as well as a decline in thedemand for real estate in Dubai. This may have a material adverse effect on the revenues generatedby the Company.

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The success of the real estate projects and investments outside the UAE will be affected byany economic or political uncertainty within the relevant countries

The Company has ventured into emerging markets in other countries within the Gulf Co-operationCouncil (“GCC”), North Africa and Turkey mainly via SAMA Dubai, its international real estatedevelopment arm (see “The Company – SAMA Dubai”).

SAMA Dubai has focused on the development of high end residential, business and leisurecommunities as well as spa resorts in countries such as Oman, Qatar, Bahrain, Morocco and Turkey.These properties have been popular with purchasers, investors and tourists in Dubai but in many ofthese countries, lifestyle, business and residential communities have not yet been developed on thescale seen in Dubai. There can be no assurance that those projects would attract a sufficientnumber of customers or investors due to the different demographics and the economic and politicalconditions in these countries.

These countries may be subject to a range of economic, political and social risks which mayadversely affect the viability of those projects. Such risks include, but are not limited to, external actsof war and civil unrest, government intervention, including the imposition of tariffs, risk ofdraconian changes in law including as to title to property. While SAMA Dubai’s strategy is to investin countries with a relatively stable long-term economic and political outlook, there can be noassurance that such countries will not suffer from such occurrences and that the cost and viabilityof, and returns from, such projects would not be thereby affected.

Some of these countries are also in the process of transitioning into a market economy and areexperiencing changes in their economies and government policies (including policies relating toforeign ownership, the granting of licences and permits to build properties and repatriation ofprofits) as well as property and contractual rights. These changes may cause delays in constructionof the projects, affect the enforcement of contracts and the ability to obtain efficient legal redresswithin those jurisdictions.

An oversupply of real estate may adversely affect the prices of property

The real estate market in Dubai has grown rapidly in recent years with the development ofnumerous large scale and ambitious real estate projects in order to meet the anticipated demand forresidential, business and leisure properties brought about by strong economic growth and anincrease in tourism and business interests in Dubai. If the supply exceeds the demand for suchproperties, prices of the real estate developments owned and operated by the Company would fall,thereby reducing expected revenues which will in turn have a material adverse effect on theCompany’s financial condition and results of operations.

The Company is subject to competitive risks in the real estate market in Dubai and overseas

The Company faces competition in the real estate market from Emaar and Nakheel (each as definedherein) (see “The Company – Competition”). The Government of Dubai may present a particularvision for a potential real estate project and encourage each of these companies to present aninnovative and attractive master plan in order to achieve that vision. Therefore, the Company mustconstantly ensure that it is able to anticipate and respond to changes in the market and othercompetitive factors in the real estate industry. Any failure to do so could result in a decline in thenumber of projects awarded to the Company, thereby having an adverse effect on real estaterevenues.

In relation to its overseas developments, the Company does not currently face any viable localcompetition as the real estate markets in the relevant countries have not developed along the samescale as they have in the UAE. However, there can be no assurance that this will not change in thefuture and that the Company will not face competition from other real estate developers withinthose countries. This may result in an increase in the cost of carrying out those projects, result in an

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oversupply of real estate projects and/or a decrease in the prices of property, which may in turnhave a material adverse effect on the Company’s financial condition and results of operations.

Competition faced by the Jumeirah Group could affect its profitability

The Jumeirah Group faces competition from other well known hotel brands in Dubai and moreparticularly overseas. It is therefore essential for the Jumeirah Group to maintain a high level ofservice, promote the exclusivity of its hotels and retail areas as well as ensure that it is ahead of itscompetitors. If the Jumeirah Group is unable to maintain its luxury hotel status, this could result in adecline in its occupancy rates and the number of visitors it attracts thereby causing a decline in itsrevenues.

The real estate projects developed and/or operated by the Company may be affected bynatural disasters and other environmental risks

The real estate projects developed and/or operated by the Company are exposed to the effects ofnatural disasters and major accidents which are beyond its control. Although the projects areconstructed, operated and maintained to withstand certain of these occurrences, they may not befully protected in all circumstances and there can be no assurance that such events would not delaythe completion of those projects, cause a decline in their value or cause those projects to beabandoned entirely. These factors may have a material adverse affect on the Company’s business,financial condition and results of operations.

UAE federal law contains provisions regarding environmental protection and development whichimpose liability on owners/developers as well as provisions under which a party may be liable forharm caused by it to another party. As a result, the Company could face potential environmentalliability as a landowner and developer under UAE federal law and the Civil Code. Moreover, if anenvironmental liability arises in relation to any project owned or operated by the Company and it isnot remedied or is not capable of being remedied, this may have a material adverse effect on theproject and the business of the Company as a whole due to the cost of rectifying the problemand/or the disruption to the project.

The real estate projects currently under development may be subject to delays incompletion as well as an increase in the cost of construction

Many of the real estate properties developed by the Company, particularly those of SAMA Dubai,Tatweer Dubai LLC (“Tatweer”) and Dubai Properties LLC (“DP”), are still in the initial stages ofconstruction and have significant capital expenditure requirements. As construction is outsourced tothird party contractors, the completion of those projects is dependent upon the contractors’ abilityto meet their targets. There may be a future shortage of certain building materials, which may resultin construction delays of between 4-6 months. Although the Company does not solely rely on onebuilding contractor for each project, some of its projects will naturally be exposed to such delays.Such delays and increase in costs could adversely affect the profits derived from such projects.

The Company’s future development and construction activities may be subject to variousobstacles

The Company intends to continue developing new properties in the future both in Dubai and inother regional markets. Its future development and construction activities may be subject to variousrisks including:

• the inability to obtain desirable property locations;

• delays or refusals to obtain all necessary zoning, land use, building, occupancy and otherrequired governmental permits and authorisations particularly in developments outside Dubai;

• the inability to complete its projects on schedule or within budgeted amounts; and

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• fluctuations in occupancy rates at newly developed properties due to a number of factors(including market and economic conditions).

Dependency on pre-selling of its properties to finance the real estate projects

A large number of the real estate projects developed by the Company are financed by pre-selling(see “The Company – Strategy”). By pre-selling such properties, the Company obtains funds fromthe initial deposits and instalments paid by customers for residential or commercial spaces prior to,or in the early stages of, construction of the projects. The ability to pre-sell depends on thecustomers’ belief that the project is viable in the long term and that the Company will deliver highstandards of quality which will result in attractive economic returns. However, completion delays,material shortages or adverse market conditions could impact the ability to pre-sell effectivelythereby increasing the Company’s reliance on other methods of funding.

The rights of holders of the Notes may be subject to UAE bankruptcy law

In the event of the Company’s insolvency, UAE bankruptcy law may, to the extent that it applies toa limited liability company, adversely affect the Company’s ability to perform its obligations underthe Notes. There is little precedent to predict how claims by or on behalf of the holders of Noteswould be resolved, and therefore there can be no assurance that such holders of Notes will receiverepayment of their claims in full or at all.

UAE law and courts and the enforcement of foreign judgments in the Emirate of Dubai

The Emirate of Dubai’s courts are unlikely to enforce an English judgment without re-examining themerits of the claim and may not observe the parties’ choice of English law as the governing law ofthe transaction. In addition, even if English law is applied as the governing law, this will only beapplied to the extent that it is compatible with the Emirate of Dubai law and public policy.Moreover, judicial precedent in the UAE has no binding effect on subsequent decisions and there isno formal system of reporting court decisions in the UAE. These factors create greater judicialuncertainty than would be expected in certain other jurisdictions.

Risks Relating to the Notes

Notes may not be a suitable investment for all investors

Each potential investor in any Notes must determine the suitability of that investment in light of itsown circumstances. In particular, each potential investor should:

(i) have sufficient knowledge and experience to make a meaningful evaluation of the relevantNotes, the merits and risks of investing in the relevant Notes and the information containedor incorporated by reference in this Prospectus or any applicable supplement;

(ii) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context ofits particular financial situation, an investment in the relevant Notes and the impact suchinvestment will have on its overall investment portfolio;

(iii) have sufficient financial resources and liquidity to bear all of the risks of an investment in therelevant Notes, including where principal or interest is payable in one or more currencies, orwhere the currency for principal or interest payments is different from the potential investor’scurrency;

(iv) understand thoroughly the terms of the relevant Notes and be familiar with the behaviour ofany relevant indices and financial markets; and

(v) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios foreconomic, interest rate and other factors that may affect its investment and its ability to bearthe applicable risks.

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Some Notes are complex financial instruments and such instruments may be purchased as a way toreduce risk or enhance yield with an understood, measured, appropriate addition of risk to theiroverall portfolios. A potential investor should not invest in Notes which are complex financialinstruments unless it has the expertise (either alone or with the help of a financial adviser) toevaluate how the Notes will perform under changing conditions, the resulting effects on the valueof such Notes and the impact this investment will have on the potential investor’s overall investmentportfolio.

Risks related to the structure of a particular issue of Notes

A wide range of Notes may be issued under the Programme. A number of these Notes may havefeatures which contain particular risks for potential investors. Set out below is a description ofcertain such features:

The Notes may be redeemed prior to maturity

Unless in the case of any particular Tranche of Notes the relevant Final Terms specifies otherwise, inthe event that the Issuer would be obliged to pay additional amounts as described under Condition7 or the Company would be unable for reasons outside its control to procure payment by the Issuerand in making payment itself would be required to pay such additional amounts, in either case, as aresult of any change in, or amendment to, the laws or regulations of the Cayman Islands (in thecase of a payment to be made by the Issuer) or the United Arab Emirates or any Emirate therein (inthe case of a payment to be made by the Company) or, in each case, any political subdivision or anyauthority thereof or therein having power to tax, or any change in the application or officialinterpretation of such laws or regulations, which change or amendment becomes effective on orafter the date on which agreement is reached to issue the first Tranche of the Notes, subject asprovided in Condition 5(c), the Issuer may redeem all outstanding Notes in accordance with theConditions.

In addition, if in the case of any particular Tranche of Notes the relevant Final Terms specifies thatthe Notes are redeemable at the Issuer’s option in certain other circumstances the Issuer maychoose to redeem the Notes at times when prevailing interest rates may be relatively low. In suchcircumstances an investor may not be able to reinvest the redemption proceeds in a comparablesecurity at an effective interest rate as high as that of the relevant Notes.

Index Linked Notes and Dual Currency Notes

The Issuer may issue Notes with principal or interest determined by reference to an index orformula, to changes in the prices of securities or commodities, to movements in currency exchangerates or other factors (each, a “Relevant Factor”). In addition, the Issuer may issue Notes withprincipal or interest payable in one or more currencies which may be different from the currency inwhich the Notes are denominated. Potential investors should be aware that:

(i) the market price of such Notes may be volatile;

(ii) they may receive no interest;

(iii) payment of principal or interest may occur at a different time or in a different currency thanexpected;

(iv) the amount of principal payable at redemption may be less than the nominal amount of suchNotes or even zero;

(v) a Relevant Factor may be subject to significant fluctuations that may not correlate withchanges in interest rates, currencies or other indices;

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(vi) if a Relevant Factor is applied to Notes in conjunction with a multiplier greater than one orcontains some other leverage factor, the effect of changes in the Relevant Factor on principalor interest payable likely will be magnified; and

(vii) the timing of changes in a Relevant Factor may affect the actual yield to investors, even if theaverage level is consistent with their expectations. In general, the earlier the change in theRelevant Factor, the greater the effect on yield.

Partly Paid Notes

The Issuer may issue Notes where the issue price is payable in more than one instalment. Failure topay any subsequent instalment could result in an investor losing all of its investment.

Variable rate Notes with a multiplier or other leverage factor

Notes with variable interest rates can be volatile investments. If they are structured to includemultipliers or other leverage factors, or caps or floors, or any combination of those features or othersimilar related features, their market values may be even more volatile than those for securities thatdo not include those features.

Inverse Floating Rate Notes

Inverse Floating Rate Notes have an interest rate equal to a fixed rate minus a rate based upon areference rate such as LIBOR. The market values of such Notes typically are more volatile thanmarket values of other conventional floating rate debt securities based on the same reference rate(and with otherwise comparable terms). Inverse Floating Rate Notes are more volatile because anincrease in the reference rate not only decreases the interest rate of the Notes, but may also reflectan increase in prevailing interest rates, which further adversely affects the market value of suchNotes.

Fixed/Floating Rate Notes

Fixed/Floating Rate Notes may bear interest at a rate that the Issuer may elect to convert from afixed rate to a floating rate, or from a floating rate to a fixed rate. The Issuer’s ability to convert theinterest rate will affect the secondary market and the market value of such Notes since the Issuermay be expected to convert the rate when it is likely to produce a lower overall cost of borrowing. Ifthe Issuer converts from a fixed rate to a floating rate, the spread on the Fixed/Floating Rate Notesmay be less favourable than then prevailing spreads on comparable Floating Rate Notes tied to thesame reference rate. In addition, the new floating rate at any time may be lower than the rates onother Notes. If the Issuer converts from a floating rate to a fixed rate, the fixed rate may be lowerthan then prevailing rates on its Notes.

Notes issued at a substantial discount or premium

The market values of securities issued at a substantial discount or premium to their nominal amounttend to fluctuate more in relation to general changes in interest rates than do prices forconventional interest-bearing securities. Generally, the longer the remaining term of the securities,the greater the price volatility as compared to conventional interest-bearing securities withcomparable maturities.

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Risks related to Notes generally

Set out below is a brief description of certain risks relating to the Notes generally:

Because the Global Notes are held by or on behalf of Euroclear and Clearstream, Luxembourg,investors will have to rely on their procedures for transfer, payment and communication with theIssuer

Notes issued under the Programme may be represented by one or more Global Notes. Such GlobalNotes will be deposited with a common depositary for Euroclear and Clearstream, Luxembourg.Except in the circumstances described in the relevant Global Note, investors will not be entitled toreceive Definitive Notes. Euroclear and Clearstream, Luxembourg will maintain records of thebeneficial interests in the Global Notes. While the Notes are represented by one or more GlobalNotes, investors will be able to trade their beneficial interests only through Euroclear andClearstream, Luxembourg.

While the Notes are represented by one or more Global Notes, the Issuer will discharge its paymentobligations under the Notes by making payments to the common depositary for Euroclear andClearstream, Luxembourg for distribution to their account holders. A holder of a beneficial interestin a Global Note must rely on the procedures of Euroclear and Clearstream, Luxembourg to receivepayments under the relevant Notes. The Issuer has no responsibility or liability for the recordsrelating to, or payments made in respect of, beneficial interests in the Global Notes.

Holders of beneficial interests in the Global Notes will not have a direct right to vote in respect ofthe relevant Notes. Instead, such holders will be permitted to act only to the extent that they areenabled by Euroclear and Clearstream, Luxembourg to appoint appropriate proxies.

Modification, waivers and substitution

The Terms and Conditions of the Notes contain provisions for calling meetings of Noteholders toconsider matters affecting their interests generally. These provisions permit defined majorities tobind all Noteholders including Noteholders who did not attend and vote at the relevant meetingand Noteholders who voted in a manner contrary to the majority.

The Terms and Conditions of the Notes also provide that the Trustee may, without the consent ofNoteholders, agree to (i) any modification of, or to the waiver or authorisation of any breach orproposed breach of, any of the provisions of Notes or (ii) determine without the consent of theNoteholders that any Event of Default or potential Event of Default shall not be treated as such or(iii) the substitution of another company as principal debtor under any Notes in place of the Issuer,in the circumstances described in Condition 10.

European Monetary Union

If the United Kingdom joins the European Monetary Union prior to the maturity of the Notes, thereis no assurance that this would not adversely affect investors in the Notes. It is possible that prior tothe maturity of the Notes the United Kingdom may become a participating Member State and thatthe Euro may become the lawful currency of the United Kingdom. In that event (i) all amountspayable in respect of any Notes denominated in Sterling may become payable in Euro; (ii) the lawmay allow or require such Notes to be re-denominated into Euro and additional measures to betaken in respect of such Notes; and (iii) there may no longer be available published or displayedrates for deposits in Sterling used to determine the rates of interest on such Notes or changes in theway those rates are calculated, quoted and published or displayed. The introduction of the Eurocould also be accompanied by a volatile interest rate environment, which could adversely affectinvestors in the Notes.

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EU Savings Directive

Under EC Council Directive 2003/48/EC on the taxation of savings income, each Member State isrequired, from 1 July 2005, to provide to the tax authorities of another Member State details ofpayments of interest (or similar income) paid by a person within its jurisdiction to an individualresident in that other Member State. However, for a transitional period, Belgium, Luxembourg andAustria are instead required (unless during that period they elect otherwise) to operate awithholding system in relation to such payments (the ending of such transitional period beingdependent upon the conclusion of certain other agreements relating to information exchange withcertain other counties). A number of non-EU countries and territories including the Cayman Islandshave adopted similar measures with effect from the same date.

If a payment were to be made or collected through a Member State which has opted for awithholding system and an amount of, or in respect of, tax were to be withheld from that payment,neither the Issuer nor any Paying Agent nor any other person would be obliged to pay additionalamounts with respect to any Note as a result of the imposition of such withholding tax. If awithholding tax is imposed on payment made by a Paying Agent, the Issuer will be required tomaintain a Paying Agent in a Member State that will not be obliged to withhold or deduct taxpursuant to the Directive.

Change of law

The Terms and Conditions of the Notes are based on English law in effect as at the date of issue ofthe relevant Notes. No assurance can be given as to the impact of any possible judicial decision orchange to English law or administrative practice after the date of issue of the relevant Notes.

Risks related to the market generally

Set out below is a brief description of certain market risks, including liquidity risk, exchange raterisk, interest rate risk and credit risk:

There is no active trading market for the Notes

Notes issued under the Programme will be new securities which may not be widely distributed andfor which there is currently no active trading market (unless in the case of any particular Tranche,such Tranche is to be consolidated with and form a single series with a Tranche of Notes which isalready issued). If the Notes are traded after their initial issuance, they may trade at a discount totheir initial offering price, depending upon prevailing interest rates, the market for similar securities,general economic conditions and the financial condition of the Company. There is no assurance asto the development or liquidity of any trading market for any particular Tranche of Notes.

Exchange rate risks and exchange controls

The Issuer will pay principal and interest on the Notes in the Specified Currency. This presentscertain risks relating to currency conversions if an investor’s financial activities are denominatedprincipally in a currency or currency unit (the “Investor’s Currency”) other than the SpecifiedCurrency. These include the risk that exchange rates may significantly change (including changesdue to devaluation of the Specified Currency or revaluation of the Investor’s Currency) and the riskthat authorities with jurisdiction over the Investor’s Currency may impose or modify exchangecontrols. An appreciation in the value of the Investor’s Currency relative to the Specified Currencywould decrease (1) the Investor’s Currency-equivalent yield on the Notes, (2) the Investor’s Currencyequivalent value of the principal payable on the Notes and (3) the Investor’s Currency equivalentmarket value of the Notes.

Government and monetary authorities may impose (as some have done in the past) exchangecontrols that could adversely affect an applicable exchange rate. As a result, investors may receiveless interest or principal than expected, or no interest or principal.

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Interest rate risks

Investment in Fixed Rate Notes involves the risk that subsequent changes in market interest ratesmay adversely affect the value of Fixed Rate Notes.

Credit ratings may not reflect all risks

One or more independent credit rating agencies may assign credit ratings to an issue of Notes. Theratings may not reflect the potential impact of all risks related to structure, market, additionalfactors discussed above, and other factors that may affect the value of the Notes. A credit rating isnot a recommendation to buy, sell or hold securities and may be revised or withdrawn by the ratingagency at any time.

Legal investment considerations may restrict certain investments

The investment activities of certain investors are subject to legal investment laws and regulations, orreview or regulation by certain authorities. Each potential investor should consult its legal advisers todetermine whether and to what extent (1) Notes are legal investments for it, (2) Notes can be usedas collateral for various types of borrowing and (3) other restrictions apply to its purchase or pledgeof any Notes. Financial institutions should consult their legal advisers or the appropriate regulatorsto determine the appropriate treatment of Notes under any applicable risk-based capital or similarrules.

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Terms and Conditions of the Notes

The following is the text of the terms and conditions that, subject to completion and amendmentand as supplemented or varied in accordance with the provisions of Part A of the relevant FinalTerms, shall be applicable to the Notes in definitive form (if any) issued in exchange for the GlobalNote(s) representing each Series. Either (i) the full text of these terms and conditions together withthe relevant provisions of Part A of the Final Terms or (ii) these terms and conditions as socompleted, amended, supplemented or varied (and subject to simplification by the deletion of non-applicable provisions), shall be endorsed on the Notes. All capitalised terms that are not defined inthese Conditions will have the meanings given to them in Part A of the relevant Final Terms. Thosedefinitions will be endorsed on the definitive Notes. References in the Conditions to “Notes” are tothe Notes of one Series only, not to all Notes that may be issued under the Programme.

The Notes are constituted by a Trust Deed (as amended or supplemented as at the date of issue ofthe Notes (the “Issue Date”), the “Trust Deed”) dated 23 January 2007 between the Issuer, theGuarantor, and HSBC Trustee (C.I.) Limited (the “Trustee”, which expression shall include allpersons for the time being the trustee or trustees under the Trust Deed) as trustee for theNoteholders (as defined below). These terms and conditions include summaries of, and are subjectto, the detailed provisions of the Trust Deed, which includes the form of the Notes, Receipts,Coupons and Talons referred to below. An Agency Agreement (as amended or supplemented as atthe Issue Date, the “Agency Agreement”) dated 23 January 2007 has been entered into inrelation to the Notes between the Issuer, the Guarantor, the Trustee, HSBC Bank plc as initialissuing and paying agent and the other agent named in it. The issuing and paying agent, the payingagents and the calculation agent(s) for the time being (if any) are referred to below respectively asthe “Issuing and Paying Agent”, the “Paying Agents” (which expression shall include the Issuingand Paying Agent) and the “Calculation Agent(s)”. Copies of the Trust Deed and the AgencyAgreement are available for inspection during usual business hours at the principal office of theTrustee (presently at 1 Grenville Street, St. Helier, Jersey JE4 9PF, Channel Islands) and at thespecified offices of the Paying Agents.

The Noteholders, the holders of the interest coupons (the “Coupons”) relating to interest bearingNotes and, where applicable in the case of such Notes, talons for further Coupons (the “Talons”)(the “Couponholders”) and the holders of the receipts for the payment of instalments of principal(the “Receipts”) relating to Notes of which the principal is payable in instalments are entitled to thebenefit of, are bound by, and are deemed to have notice of, all the provisions of the Trust Deed andare deemed to have notice of those provisions applicable to them of the Agency Agreement.

As used in these Conditions, “Tranche” means Notes which are identical in all respects.

1. Form, Denomination and Title

The Notes are issued in bearer form in the Specified Denomination(s) shown hereon provided thatthe minimum Specified Denomination shall be ¤50,000 (or the equivalent in any other currency asat the date of issue of the relevant Notes).

This Note is a Fixed Rate Note, a Floating Rate Note, a Zero Coupon Note, an Index Linked InterestNote, an Index Linked Redemption Note, an Instalment Note, a Dual Currency Note or a Partly PaidNote, a combination of any of the foregoing or any other kind of Note, depending upon theInterest and Redemption/Payment Basis shown hereon.

Notes are serially numbered and are issued with Coupons (and, where appropriate, a Talon)attached, save in the case of Zero Coupon Notes in which case references to interest (other than inrelation to interest due after the Maturity Date), Coupons and Talons in these Conditions are notapplicable. Instalment Notes are issued with one or more Receipts attached.

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Title to the Notes, the Receipts, the Coupons and the Talons shall pass by delivery. Except asordered by a court of competent jurisdiction or as required by law, the holder (as defined below) ofany Note, Receipt, Coupon or Talon shall be deemed to be and may be treated as its absoluteowner for all purposes whether or not it is overdue and regardless of any notice of ownership, trustor an interest in it, any writing on it and no person shall be liable for so treating the holder.

In these Conditions, “Noteholder” means the bearer of any Note and the Receipts relating to it,“holder” (in relation to a Note, Receipt, Coupon or Talon) means the bearer of such Note, Receipt,Coupon or Talon and capitalised terms have the meanings given to them hereon, the absence ofany such meaning indicating that such term is not applicable to the Notes.

2. Guarantee and Status

(a) Guarantee: The Guarantor has unconditionally and irrevocably guaranteed the due paymentof all sums expressed to be payable by the Issuer under the Trust Deed, the Notes, Receiptsand Coupons. Its obligations in that respect (the “Guarantee”) are contained in the TrustDeed.

(b) Status of Notes and Guarantee: The Notes and the Receipts and Coupons relating to themconstitute (subject to Condition 3) unsecured obligations of the Issuer and shall at all timesrank pari passu and without any preference among themselves. The payment obligations ofthe Issuer under the Notes and the Receipts and Coupons relating to them and of theGuarantor under the Guarantee shall, save for such exceptions as may be provided byapplicable legislation and subject to Condition 3, at all times rank at least equally with allother unsecured and unsubordinated indebtedness and monetary obligations of the Issuerand the Guarantor respectively, present and future.

3. Negative Pledge

So long as any Note or Coupon remains outstanding (as defined in the Trust Deed), neither theIssuer nor the Guarantor will, and the Guarantor will ensure that none of its other Subsidiaries will,create, or have outstanding, any mortgage, charge, lien, pledge or other security interest (each a“Security Interest”), other than a Permitted Security Interest, upon the whole or any part of itspresent or future undertaking, assets or revenues (including any uncalled capital) to secure anyRelevant Indebtedness, or any guarantee or indemnity in respect of any Relevant Indebtedness,without at the same time or prior thereto according to the Notes and the Coupons the samesecurity as is created or subsisting to secure any such Relevant Indebtedness, guarantee orindemnity or such other security as either (i) the Trustee shall in its absolute discretion deem notmaterially less beneficial to the interest of the Noteholders or (ii) shall be approved by anExtraordinary Resolution (as defined in the Trust Deed) of the Noteholders.

In these Conditions:

“Non-recourse Project, Securitisation or Asset Financing” means any securitisation (Islamic orotherwise) of existing or future assets, or the financing of all or part of the costs of the acquisition,construction or development of any project or asset, provided that (i) any Security Interest given bythe Issuer, Guarantor or the relevant Subsidiary is limited solely to assets of the securitisation, theproject or to the value of the asset (as applicable), (ii) the person or persons participating in suchsecuritisation or providing such financing expressly agrees or agree to limit their recourse to theproject or asset (as applicable) so securitised or financed and the revenues derived from such projector asset (as applicable) as the principal source of repayment for the moneys advanced and (iii) thereis no other recourse to the Issuer, Guarantor or the relevant Subsidiary in respect of any default byany person under the securitisation or financing.

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“Permitted Security Interest” means:

(i) any Security Interest in respect of any Relevant Indebtedness, provided that the aggregateoutstanding amount secured thereby shall not at any time exceed an amount equal to 10 percent. of the aggregate of the share capital and reserves of the Guarantor and its Subsidiaries,as shown in its most recent audited consolidated financial statements or Combined FinancialStatements (as defined in Condition 9);

(ii) any Security Interest securing Relevant Indebtedness of a person and/or its subsidiaries existingat the time that such person is merged into or consolidated with the Guarantor or anySubsidiary, provided that such Security Interest was not created in contemplation of suchmerger or consolidation and does not extend to any other assets or property of the Guarantoror any Subsidiary;

(iii) any Security Interest created in connection with any Non-recourse Project, Securitisation orAsset Financing; or

(iv) any renewal of or substitution for any Security Interest permitted by any of the precedingclauses (i) through (iii), provided that with respect to any such Security Interest the principalamount secured has not increased and the Security Interest has not been extended to anyadditional assets (other than the proceeds of such assets).

“Relevant Indebtedness” means any indebtedness which is in the form of, or represented orevidenced by, bonds, notes, debentures, loan stock, sukuk certificates or other securities which forthe time being are, or are intended to be, or capable of being, quoted, listed or dealt in or tradedon any stock exchange or over-the-counter or other securities market; and

“Subsidiary” means, at any particular time, any company which is then directly or indirectlycontrolled, or at least 50% of whose issued equity share capital (or equivalent) is then beneficiallyowned, by the Guarantor. For a company to be “controlled” by the Guarantor means that theGuarantor (whether directly or indirectly and whether by the ownership of share capital, thepossession of voting power, contract or otherwise) has the power to appoint and/or remove all orthe majority of the members of the Board of Directors or other governing body of that company orotherwise controls or has the power to control the affairs and policies of that company.

4. Interest and other Calculations

(a) Interest on Fixed Rate Notes: Each Fixed Rate Note bears interest on its outstandingnominal amount from the Interest Commencement Date at the rate per annum (expressed asa percentage) equal to the Rate of Interest, such interest being payable in arrear on eachInterest Payment Date. The amount of interest payable shall be determined in accordancewith Condition 5(h).

(b) Interest on Floating Rate Notes and Index Linked Interest Notes:

(i) Interest Payment Dates: Each Floating Rate Note and Index Linked Interest Note bearsinterest on its outstanding nominal amount from the Interest Commencement Date atthe rate per annum (expressed as a percentage) equal to the Rate of Interest, suchinterest being payable in arrear on each Interest Payment Date. The amount of interestpayable shall be determined in accordance with Condition 5(h). Such Interest PaymentDate(s) is/are either shown hereon as Specified Interest Payment Dates or, if noSpecified Interest Payment Date(s) is/are shown hereon, Interest Payment Date shallmean each date which falls the number of months or other period shown hereon asthe Interest Period after the preceding Interest Payment Date or, in the case of the firstInterest Payment Date, after the Interest Commencement Date.

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(ii) Business Day Convention: If any date referred to in these Conditions that is specified tobe subject to adjustment in accordance with a Business Day Convention wouldotherwise fall on a day that is not a Business Day, then, if the Business Day Conventionspecified is (A) the Floating Rate Business Day Convention, such date shall bepostponed to the next day that is a Business Day unless it would thereby fall into thenext calendar month, in which event (x) such date shall be brought forward to theimmediately preceding Business Day and (y) each subsequent such date shall be the lastBusiness Day of the month in which such date would have fallen had it not beensubject to adjustment, (B) the Following Business Day Convention, such date shall bepostponed to the next day that is a Business Day, (C) the Modified Following BusinessDay Convention, such date shall be postponed to the next day that is a Business Dayunless it would thereby fall into the next calendar month, in which event such dateshall be brought forward to the immediately preceding Business Day or (D) thePreceding Business Day Convention, such date shall be brought forward to theimmediately preceding Business Day.

(iii) Rate of Interest for Floating Rate Notes: The Rate of Interest in respect of Floating RateNotes for each Interest Accrual Period shall be determined in the manner specifiedhereon and the provisions below relating to either ISDA Determination or Screen RateDetermination shall apply, depending upon which is specified hereon.

(A) ISDA Determination for Floating Rate Notes

Where ISDA Determination is specified hereon as the manner in which the Rateof Interest is to be determined, the Rate of Interest for each Interest AccrualPeriod shall be determined by the Calculation Agent as a rate equal to therelevant ISDA Rate. For the purposes of this sub-paragraph (A), “ISDA Rate” foran Interest Accrual Period means a rate equal to the Floating Rate that would bedetermined by the Calculation Agent under a Swap Transaction under the termsof an agreement incorporating the ISDA Definitions and under which:

(x) the Floating Rate Option is as specified hereon;

(y) the Designated Maturity is a period specified hereon; and

(z) the relevant Reset Date is the first day of that Interest Accrual Period unlessotherwise specified hereon.

For the purposes of this sub-paragraph (A), “Floating Rate”, “CalculationAgent”, “Floating Rate Option”, “Designated Maturity”, “Reset Date” and“Swap Transaction” have the meanings given to those terms in the ISDADefinitions.

(B) Screen Rate Determination for Floating Rate Notes

(x) Where Screen Rate Determination is specified hereon as the manner inwhich the Rate of Interest is to be determined, the Rate of Interest foreach Interest Accrual Period will, subject as provided below, be either:

(1) the offered quotation; or

(2) the arithmetic mean of the offered quotations,

(expressed as a percentage rate per annum) for the Reference Rate whichappears or appear, as the case may be, on the Relevant Screen Page as ateither 11.00 a.m. (London time in the case of LIBOR or Brussels time in thecase of EURIBOR) on the Interest Determination Date in question asdetermined by the Calculation Agent. If five or more of such offeredquotations are available on the Relevant Screen Page, the highest (or, if

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there is more than one such highest quotation, one only of suchquotations) and the lowest (or, if there is more than one such lowestquotation, one only of such quotations) shall be disregarded by theCalculation Agent for the purpose of determining the arithmetic mean ofsuch offered quotations.

If the Reference Rate from time to time in respect of Floating Rate Notes isspecified hereon as being other than LIBOR or EURIBOR, the Rate ofInterest in respect of such Notes will be determined as provided hereon.

(y) If the Relevant Screen Page is not available or if, sub-paragraph (x)(1)applies and no such offered quotation appears on the Relevant ScreenPage or if sub-paragraph (x)(2) above applies and fewer than three suchoffered quotations appear on the Relevant Screen Page in each case as atthe time specified above, subject as provided below, the Calculation Agentshall request, if the Reference Rate is LIBOR, the principal London office ofeach of the Reference Banks or, if the Reference Rate is EURIBOR, theprincipal Euro-zone office of each of the Reference Banks, to provide theCalculation Agent with its offered quotation (expressed as a percentagerate per annum) for the Reference Rate if the Reference Rate is LIBOR, atapproximately 11.00 a.m. (London time), or if the Reference Rate isEURIBOR, at approximately 11.00 a.m. (Brussels time) on the InterestDetermination Date in question. If two or more of the Reference Banksprovide the Calculation Agent with such offered quotations, the Rate ofInterest for such Interest Accrual Period shall be the arithmetic mean ofsuch offered quotations as determined by the Calculation Agent.

(z) If paragraph (y) above applies and the Calculation Agent determines thatfewer than two Reference Banks are providing offered quotations, subjectas provided below, the Rate of Interest shall be the arithmetic mean of therates per annum (expressed as a percentage) as communicated to (and atthe request of) the Calculation Agent by the Reference Banks or any twoor more of them, at which such banks were offered, if the Reference Rateis LIBOR, at approximately 11.00 a.m. (London time) or, if the ReferenceRate is EURIBOR, at approximately 11.00 a.m. (Brussels time) on therelevant Interest Determination Date, deposits in the Specified Currency fora period equal to that which would have been used for the Reference Rateby leading banks in, if the Reference Rate is LIBOR, the London inter-bankmarket or, if the Reference Rate is EURIBOR, the Euro-zone inter-bankmarket, as the case may be, or, if fewer than two of the Reference Banksprovide the Calculation Agent with such offered rates, the offered rate fordeposits in the Specified Currency for a period equal to that which wouldhave been used for the Reference Rate, or the arithmetic mean of theoffered rates for deposits in the Specified Currency for a period equal tothat which would have been used for the Reference Rate, at which, if theReference Rate is LIBOR, at approximately 11.00 a.m. (London time) or, ifthe Reference Rate is EURIBOR, at approximately 11.00 a.m. (Brusselstime), on the relevant Interest Determination Date, any one or more banks(which bank or banks is or are in the opinion of the Trustee and the Issuersuitable for such purpose) informs the Calculation Agent it is quoting toleading banks in, if the Reference Rate is LIBOR, the London inter-bankmarket or, if the Reference Rate is EURIBOR, the Euro-zone inter-bankmarket, as the case may be, provided that, if the Rate of Interest cannot bedetermined in accordance with the foregoing provisions of this paragraph,the Rate of Interest shall be determined as at the last preceding InterestDetermination Date (though substituting, where a different Margin or

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Maximum or Minimum Rate of Interest is to be applied to the relevantInterest Accrual Period from that which applied to the last precedingInterest Accrual Period, the Margin or Maximum or Minimum Rate ofInterest relating to the relevant Interest Accrual Period, in place of theMargin or Maximum or Minimum Rate of Interest relating to that lastpreceding Interest Accrual Period).

(iv) Rate of Interest for Index Linked Interest Notes: The Rate of Interest in respect of IndexLinked Interest Notes for each Interest Accrual Period shall be determined in themanner specified hereon and interest will accrue by reference to an Index or Formula asspecified hereon.

(c) Zero Coupon Notes: Where a Note the Interest Basis of which is specified to be ZeroCoupon is repayable prior to the Maturity Date and is not paid when due, the amount dueand payable prior to the Maturity Date shall be the Early Redemption Amount of such Note.As from the Maturity Date, the Rate of Interest for any overdue principal of such a Note shallbe a rate per annum (expressed as a percentage) equal to the Amortisation Yield (asdescribed in Condition 5(b)(i)).

(d) Dual Currency Notes: In the case of Dual Currency Notes, if the rate or amount of interestfalls to be determined by reference to a Rate of Exchange or a method of calculating Rate ofExchange, the rate or amount of interest payable shall be determined in the manner specifiedhereon.

(e) Partly Paid Notes: In the case of Partly Paid Notes (other than Partly Paid Notes which areZero Coupon Notes), interest will accrue as aforesaid on the paid-up nominal amount of suchNotes and otherwise as specified hereon.

(f) Accrual of Interest: Interest shall cease to accrue on each Note on the due date forredemption unless, upon due presentation, payment is improperly withheld or refused, inwhich event interest shall continue to accrue (as well after as before judgment) at the Rate ofInterest in the manner provided in this Condition 4 to the Relevant Date (as defined inCondition 7).

(g) Margin, Maximum/Minimum Rates of Interest, Instalment Amounts and RedemptionAmounts and Rounding:

(i) If any Margin is specified hereon (either (x) generally, or (y) in relation to one or moreInterest Accrual Periods), an adjustment shall be made to all Rates of Interest, in thecase of (x), or the Rates of Interest for the specified Interest Accrual Periods, in the caseof (y), calculated in accordance with Condition 4(b) above by adding (if a positivenumber) or subtracting the absolute value (if a negative number) of such Margin,subject always to the next paragraph.

(ii) If any Maximum or Minimum Rate of Interest, Instalment Amount or RedemptionAmount is specified hereon, then any Rate of Interest, Instalment Amount orRedemption Amount shall be subject to such maximum or minimum, as the case maybe.

(iii) For the purposes of any calculations required pursuant to these Conditions (unlessotherwise specified), (x) all percentages resulting from such calculations shall berounded, if necessary, to the nearest one hundred-thousandth of a percentage point(with halves being rounded up), (y) all figures shall be rounded to seven significantfigures (with halves being rounded up) and (z) all currency amounts that fall due andpayable shall be rounded to the nearest unit of such currency (with halves beingrounded up), save in the case of yen, which shall be rounded down to the nearest yen.For these purposes “unit” means the lowest amount of such currency that is availableas legal tender in the country or countries of such currency.

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(h) Calculations: The amount of interest payable per Calculation Amount in respect of any Notefor any Interest Accrual Period shall be equal to the product of the Rate of Interest, theCalculation Amount specified hereon and the Day Count Fraction for such Interest AccrualPeriod, unless an Interest Amount (or a formula for its calculation) is applicable to suchInterest Accrual Period, in which case the amount of interest payable per Calculation Amountin respect of such Note for such Interest Accrual Period shall equal such Interest Amount (orbe calculated in accordance with such formula). Where any Interest Period comprises two ormore Interest Accrual Periods, the amount of interest payable per Calculation Amount inrespect of such Interest Period shall be the sum of the Interest Amounts payable in respect ofeach of those Interest Accrual Periods. In respect of any other period for which interest isrequired to be calculated, the provisions above shall apply save that the Day Count Fractionshall be for the period for which interest is required to be calculated.

(i) Determination and Publication of Rates of Interest, Interest Amounts, FinalRedemption Amounts, Early Redemption Amounts, Optional Redemption Amountsand Instalment Amounts: The Calculation Agent shall, as soon as practicable on eachInterest Determination Date, or such other time on such date as the Calculation Agent maybe required to calculate any rate or amount, obtain any quotation or make any determinationor calculation, determine such rate and calculate the Interest Amounts for the relevantInterest Accrual Period, calculate the Final Redemption Amount, Early Redemption Amount,Optional Redemption Amount or Instalment Amount, obtain such quotation or make suchdetermination or calculation, as the case may be, and cause the Rate of Interest and theInterest Amounts for each Interest Accrual Period and the relevant Interest Payment Date and,if required to be calculated, the Final Redemption Amount, Early Redemption Amount,Optional Redemption Amount or any Instalment Amount to be notified to the Trustee, theIssuer, each of the Paying Agents, the Noteholders, any other Calculation Agent appointed inrespect of the Notes that is to make a further calculation upon receipt of such informationand, if the Notes are listed on a stock exchange and the rules of such exchange or otherrelevant authority so require, such exchange or other relevant authority as soon as possibleafter their determination but in no event later than (i) the commencement of the relevantInterest Period, if determined prior to such time, in the case of notification to such exchangeof a Rate of Interest and Interest Amount, or (ii) in all other cases, the fourth Business Dayafter such determination. Where any Interest Payment Date or Interest Period Date is subjectto adjustment pursuant to Condition 4(b)(ii), the Interest Amounts and the Interest PaymentDate so published may subsequently be amended (or appropriate alternative arrangementsmade with the consent of the Trustee by way of adjustment) without notice in the event ofan extension or shortening of the Interest Period. If the Notes become due and payable underCondition 9, the accrued interest and the Rate of Interest payable in respect of the Notes shallnevertheless continue to be calculated as previously in accordance with this Condition but nopublication of the Rate of Interest or the Interest Amount so calculated need be made unlessthe Trustee otherwise requires. The determination of any rate or amount, the obtaining ofeach quotation and the making of each determination or calculation by the CalculationAgent(s) shall (in the absence of manifest error) be final and binding upon all parties.

(j) Determination or Calculation by Trustee: If the Calculation Agent does not at any time forany reason determine or calculate the Rate of Interest for an Interest Accrual Period or anyInterest Amount, Instalment Amount, Final Redemption Amount, Early Redemption Amountor Optional Redemption Amount, the Trustee shall, at the cost of the Issuer, do so (or shallappoint an agent on its behalf to do so) and such determination or calculation shall bedeemed to have been made by the Calculation Agent. In doing so, the Trustee shall apply theforegoing provisions of this Condition, with any necessary consequential amendments, to theextent that, in its opinion, it can do so, and, in all other respects it shall do so in such manneras it shall deem fair and reasonable in all the circumstances.

(k) Definitions: In these Conditions, unless the context otherwise requires, the following definedterms shall have the meanings set out below:

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“Business Day” means:

(i) in the case of a currency other than euro, a day (other than a Saturday or Sunday) onwhich commercial banks and foreign exchange markets settle payments in the principalfinancial centre for such currency; and/or

(ii) in the case of euro, a day on which the TARGET system is operating (a “TARGETBusiness Day”); and/or

(iii) in the case of a currency and/or one or more Business Centres a day (other than aSaturday or a Sunday) on which commercial banks and foreign exchange markets settlepayments in such currency in the Business Centre(s) or, if no currency is indicated,generally in each of the Business Centres.

“Day Count Fraction” means, in respect of the calculation of an amount of interest on anyNote for any period of time (from and including the first day of such period to but excludingthe last) (whether or not constituting an Interest Period or an Interest Accrual Period, the“Calculation Period”):

(i) if “Actual/365” or “Actual/Actual – ISDA” is specified hereon, the actual number ofdays in the Calculation Period divided by 365 (or, if any portion of that CalculationPeriod falls in a leap year, the sum of (A) the actual number of days in that portion ofthe Calculation Period falling in a leap year divided by 366 and (B) the actual number ofdays in that portion of the Calculation Period falling in a non-leap year divided by 365);

(ii) if “Actual/365 (Fixed)” is specified hereon, the actual number of days in theCalculation Period divided by 365;

(iii) if “Actual/360” is specified hereon, the actual number of days in the CalculationPeriod divided by 360;

(iv) if “30/360”, “360/360” or “Bond Basis” is specified hereon, the number of days inthe Calculation Period divided by 360 (the number of days to be calculated on the basisof a year of 360 days with 12 30-day months (unless (a) the last day of the CalculationPeriod is the 31st day of a month but the first day of the Calculation Period is a dayother than the 30th or 31st day of a month, in which case the month that includesthat last day shall not be considered to be shortened to a 30-day month, or (b) the lastday of the Calculation Period is the last day of the month of February, in which casethe month of February shall not be considered to be lengthened to a 30-day month));

(v) if “30E/360” or “Eurobond Basis” is specified hereon, the number of days in theCalculation Period divided by 360 (the number of days to be calculated on the basis ofa year of 360 days with 12 30-day months, without regard to the date of the first dayor last day of the Calculation Period unless, in the case of a Calculation Period endingon the Maturity Date, the Maturity Date is the last day of the month of February, inwhich case the month of February shall not be considered to be lengthened to a 30-day month); and

(vi) if “Actual/Actual-ICMA” is specified hereon,

(A) if the Calculation Period is equal to or shorter than the Determination Periodduring which it falls, the number of days in the Calculation Period divided by theproduct of (x) the number of days in such Determination Period and (y) thenumber of Determination Periods normally ending in any year; and

(B) if the Calculation Period is longer than one Determination Period, the sum of:

(x) the number of days in such Calculation Period falling in the DeterminationPeriod in which it begins divided by the product of (1) the number of days

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in such Determination Period and (2) the number of Determination Periodsnormally ending in any year; and

(y) the number of days in such Calculation Period falling in the nextDetermination Period divided by the product of (1) the number of days insuch Determination Period and (2) the number of Determination Periodsnormally ending in any year

where:

“Determination Period” means the period from and including a DeterminationDate in any year to but excluding the next Determination Date; and

“Determination Date” means the date specified as such hereon or, if none isso specified, the Interest Payment Date.

“Euro-zone” means the region comprised of member states of the European Union thatadopt the single currency in accordance with the Treaty establishing the EuropeanCommunity, as amended.

“Interest Accrual Period” means the period beginning on (and including) the InterestCommencement Date and ending on (but excluding) the first Interest Period Date and eachsuccessive peroid beginning on (and including) an Interest Period Date and ending on (butexcluding) the next succeeding Interest Period Date.

“Interest Amount” means:

(i) in respect of an Interest Accrual Period, the amount of interest payable per CalculationAmount for that Interest Accrual Period and which, in the case of Fixed Rate Notes, andunless otherwise specified hereon, shall mean the Fixed Coupon Amount or BrokenAmount specified hereon as being payable on the Interest Payment Date ending theInterest Period of which such Interest Accrual Period forms part; and

(ii) in respect of any other period, the amount of interest payable per Calculation Amountfor that period.

“Interest Commencement Date” means the Issue Date or such other date as may bespecified hereon.

“Interest Determination Date” means, with respect to a Rate of Interest and InterestAccrual Period, the date specified as such hereon or, if none is so specified, (i) the first day ofsuch Interest Accrual Period if the Specified Currency is Sterling or (ii) the day falling twoBusiness Days in London for the Specified Currency prior to the first day of such InterestAccrual Period if the Specified Currency is neither Sterling nor euro or (iii) the day falling twoTARGET Business Days prior to the first day of such Interest Accrual Period if the SpecifiedCurrency is euro.

“Interest Period” means the period beginning on (and including) the InterestCommencement Date and ending on (but excluding) the first Interest Payment Date and eachsuccessive period beginning on (and including) an Interest Payment Date and ending on (butexcluding) the next succeeding Interest Payment Date.

“Interest Period Date” means each Interest Payment Date unless otherwise specifiedhereon.

“ISDA Definitions” means the 2000 ISDA Definitions, as published by the InternationalSwaps and Derivatives Association, Inc., unless otherwise specified hereon.

“Rate of Interest” means the rate of interest payable from time to time in respect of thisNote and that is either specified or calculated in accordance with the provisions hereon.

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“Reference Banks” means, in the case of a determination of LIBOR, the principal Londonoffice of four major banks in the London inter-bank market and, in the case of adetermination of EURIBOR, the principal Euro-zone office of four major banks in the Euro-zone inter-bank market, in each case selected by the Calculation Agent or as specifiedhereon.

“Reference Rate” means the rate specified as such hereon.

“Relevant Screen Page” means such page, section, caption, column or other part of aparticular information service as may be specified hereon.

“Specified Currency” means the currency specified as such hereon or, if none is specified,the currency in which the Notes are denominated.

“TARGET System” means the Trans-European Automated Real-Time Gross SettlementExpress Transfer (TARGET) System or any successor thereto.

(l) Calculation Agent: The Issuer shall procure that there shall at all times be one or moreCalculation Agents if provision is made for them hereon and for so long as any Note isoutstanding (as defined in the Trust Deed). Where more than one Calculation Agent isappointed in respect of the Notes, references in these Conditions to the Calculation Agentshall be construed as each Calculation Agent performing its respective duties under theConditions. If the Calculation Agent is unable or unwilling to act as such or if the CalculationAgent fails duly to establish the Rate of Interest for an Interest Accrual Period or to calculateany Interest Amount, Instalment Amount, Final Redemption Amount, Early RedemptionAmount or Optional Redemption Amount, as the case may be, or to comply with any otherrequirement, the Issuer shall (with the prior approval of the Trustee) appoint a leading bankor investment banking firm engaged in the interbank market (or, if appropriate, money, swapor over-the-counter index options market) that is most closely connected with the calculationor determination to be made by the Calculation Agent (acting through its principal Londonoffice or any other office actively involved in such market) to act as such in its place. TheCalculation Agent may not resign its duties without a successor having been appointed asaforesaid.

5. Redemption, Purchase and Options

(a) Redemption by Instalments and Final Redemption:

(i) Unless previously redeemed, purchased and cancelled as provided in this Condition 5,each Note that provides for Instalment Dates and Instalment Amounts shall be partiallyredeemed on each Instalment Date at the related Instalment Amount specified hereon.The outstanding nominal amount of each such Note shall be reduced by the InstalmentAmount (or, if such Instalment Amount is calculated by reference to a proportion of thenominal amount of such Note, such proportion) for all purposes with effect from therelated Instalment Date, unless payment of the Instalment Amount is improperlywithheld or refused, in which case, such amount shall remain outstanding until theRelevant Date relating to such Instalment Amount.

(ii) Unless previously redeemed, purchased and cancelled as provided below, each Noteshall be finally redeemed on the Maturity Date specified hereon at its Final RedemptionAmount (which, unless otherwise provided hereon, is its nominal amount) or, in thecase of a Note falling within paragraph (i) above, its final Instalment Amount.

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(b) Early Redemption:

(i) Zero Coupon Notes:

(A) The Early Redemption Amount payable in respect of any Zero Coupon Note, theEarly Redemption Amount of which is not linked to an index and/or a formula,upon redemption of such Note pursuant to Condition 5(c) or upon it becomingdue and payable as provided in Condition 9 shall be the Amortised Face Amount(calculated as provided below) of such Note unless otherwise specified hereon.

(B) Subject to the provisions of sub-paragraph (C) below, the Amortised FaceAmount of any such Note shall be the scheduled Final Redemption Amount ofsuch Note on the Maturity Date discounted at a rate per annum (expressed as apercentage) equal to the Amortisation Yield (which, if none is shown hereon,shall be such rate as would produce an Amortised Face Amount equal to theissue price of the Notes if they were discounted back to their issue price on theIssue Date) compounded annually.

(C) If the Early Redemption Amount payable in respect of any such Note upon itsredemption pursuant to Condition 5(c) or upon it becoming due and payable asprovided in Condition 9 is not paid when due, the Early Redemption Amount dueand payable in respect of such Note shall be the Amortised Face Amount of suchNote as defined in sub-paragraph (B) above, except that such sub-paragraph shallhave effect as though the date on which the Note becomes due and payablewere the Relevant Date. The calculation of the Amortised Face Amount inaccordance with this sub-paragraph shall continue to be made (both before andafter judgment) until the Relevant Date, unless the Relevant Date falls on or afterthe Maturity Date, in which case the amount due and payable shall be thescheduled Final Redemption Amount of such Note on the Maturity Date togetherwith any interest that may accrue in accordance with Condition 4(c).

Where such calculation is to be a made for a period of less than one year, it shallbe made on the basis of the Day Count Fraction shown hereon.

(ii) Other Notes: The Early Redemption Amount payable in respect of any Note (other thanNotes described in (i) above), upon redemption of such Note pursuant to Condition 5(c)or upon it becoming due and payable as provided in Condition 9, shall be the FinalRedemption Amount unless otherwise specified hereon.

(c) Redemption for Taxation Reasons: The Notes may be redeemed at the option of the Issuerin whole, but not in part, on any Interest Payment Date (if this Note is either a Floating RateNote or an Index Linked Note) or at any time (if this Note is neither a Floating Rate Note noran Index Linked Note), on giving not less than 30 nor more than 60 days’ notice to theNoteholders (which notice shall be irrevocable) at their Early Redemption Amount (asdescribed in Condition 5(b) above) (together with interest accrued to the date fixed forredemption), if (i) the Issuer satisfies the Trustee immediately before the giving of such noticethat it has or will become obliged to pay additional amounts as described under Condition 7or the Guarantor would be unable for reasons outside its control to procure payment by theIssuer and in making payment itself would be required to pay such additional amounts, ineither case, as a result of any change in, or amendment to, the laws or regulations of theCayman Islands (in the case of a payment to be made by the Issuer) or the United ArabEmirates or any Emirate therein (in the case of a payment to be made by the Guarantor) or, ineach case, any political subdivision or any authority thereof or therein having power to tax, orany change in the application or official interpretation of such laws or regulations, whichchange or amendment becomes effective on or after the date on which agreement is reachedto issue the first Tranche of the Notes, and (ii) such obligation cannot be avoided by the Issuer(or the Guarantor, as the case may be) taking reasonable measures available to it, provided

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that no such notice of redemption shall be given earlier than 90 days prior to the earliest dateon which the Issuer (or the Guarantor, as the case may be) would be obliged to pay suchadditional amounts were a payment in respect of the Notes (or the Guarantee, as the casemay be) then due. Before the publication of any notice of redemption pursuant to thisparagraph, the Issuer shall deliver to the Trustee a certificate signed by two duly authorisedofficers of the Issuer (or the Guarantor, as the case may be) stating that the obligationreferred to in (i) above cannot be avoided by the Issuer (or the Guarantor, as the case may be)taking reasonable measures available to it and the Trustee shall be entitled to accept suchcertificate as sufficient evidence of the satisfaction of the condition precedent set out in (ii)above in which event it shall be conclusive and binding on Noteholders and Couponholders.

(d) Redemption at the Option of the Issuer: If a Call Option is specified hereon, the Issuermay, on giving not less than 15 nor more than 30 days’ irrevocable notice to the Noteholders(or such other notice period as may be specified hereon) redeem all or, if so provided, someof the Notes on any Optional Redemption Date. Any such redemption of Notes shall be attheir Optional Redemption Amount together with interest accrued to the date fixed forredemption. Any such redemption or exercise must relate to Notes of a nominal amount atleast equal to the Minimum Redemption Amount to be redeemed specified hereon and nogreater than the Maximum Redemption Amount to be redeemed specified hereon.

All Notes in respect of which any such notice is given shall be redeemed on the date specifiedin such notice in accordance with this Condition.

In the case of a partial redemption the notice to Noteholders shall also contain the certificatenumbers of the Notes drawn which shall have been drawn in such place as the Trustee mayapprove and in such manner as it deems appropriate, subject to compliance with anyapplicable laws and stock exchange or other relevant authority requirements.

(e) Redemption at the Option of Noteholders:

(i) If a Put Option is specified hereon, the Issuer shall, at the option of the holder of anyNote, upon the holder of such Note giving not less than 15 nor more than 30 days’notice to the Issuer (or such other notice period as may be specified hereon), redeemsuch Note on the Optional Redemption Date(s) at its Optional Redemption Amounttogether with interest accrued to the date fixed for redemption.

(ii) If a Change of Control Event occurs, the Issuer shall, at the option of the holder of anyNote, upon the holder of such Note giving notice to the Issuer at any time during theRedemption Period, redeem such Note on the Redemption Date at its principal amount(or such other amount as may be specified in the relevant Final Terms) together (whereapplicable) with interest accrued to the date fixed for redemption. The Issuer and/or theGuarantor will give notice to the Trustee and the Noteholders in accordance withCondition 15 immediately upon becoming aware of the occurrence of a Change ofControl Event.

For the purpose of this paragraph (ii):

a “Change of Control Event” will occur if at any time His Highness SheikhMohammed Bin Rashid Al Maktoum or his heirs cease(s) to own, directly or indirectly,or otherwise control at least 50% of the issued share capital of the Guarantor;

“Redemption Date” means, in respect of any Redemption Period, the date which falls14 days after the last day of such Redemption Period; and

“Redemption Period” means, in relation to any Change of Control Event, the periodfrom and including the date on which a Change of Control Event occurs to andincluding the date falling 60 days thereafter (whether or not the Issuer or theGuarantor has given the notice referred to above in respect of such event).

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(iii) To exercise such option the holder must deposit such Note (together with allunmatured Receipts and Coupons and unexchanged Talons) with any Paying Agent atits specified office, together with a duly completed option exercise notice (“ExerciseNotice”) in the form obtainable from any Paying Agent, within the notice period. NoNote so deposited and option exercised may be withdrawn (except as provided in theAgency Agreement) without the prior consent of the Issuer.

(f) Partly Paid Notes: Partly Paid Notes will be redeemed, whether at maturity, early redemptionor otherwise, in accordance with the provisions of this Condition and the provisions specifiedhereon.

(g) Purchases: The Issuer, the Guarantor and any other Subsidiary may at any time purchaseNotes (provided that all unmatured Receipts and Coupons and unexchanged Talons relatingthereto are attached thereto or surrendered therewith) in the open market or otherwise atany price.

(h) Cancellation: All Notes purchased by or on behalf of the Issuer, the Guarantor or any otherSubsidiary may be surrendered for cancellation, together with all unmatured Receipts andCoupons and all unexchanged Talons to the Issuing and Paying Agent and if so surrendered,shall, together with all Notes redeemed by the Issuer, be cancelled forthwith (together with allunmatured Receipts and Coupons and unexchanged Talons attached thereto or surrenderedtherewith). Any Notes so surrendered for cancellation may not be reissued or resold and theobligations of the Issuer and the Guarantor in respect of any such Notes shall be discharged.

6. Payments and Talons

(a) Principal and Interest: Payments of principal and interest in respect of each Note shall,subject as mentioned below, be made against presentation and surrender of the relevantReceipts (in the case of payments of Instalment Amounts other than on the due date forredemption and provided that the Receipt is presented for payment together with its relativeNote), Notes (in the case of all other payments of principal and, in the case of interest, asspecified in Condition 6(e)(vi)) or Coupons (in the case of interest, save as specified inCondition 6(e)(ii)), as the case may be, at the specified office of any Paying Agent outside theUnited States by a cheque payable in the relevant currency drawn on, or, at the option of theholder, by transfer to an account denominated in such currency with, a Bank. “Bank” meansa bank in the principal financial centre for such currency or, in the case of euro, in a city inwhich banks have access to the TARGET System.

(b) Payments in the United States: Notwithstanding the foregoing, if any Notes aredenominated in U.S. dollars, payments in respect thereof may be made at the specified officeof any Paying Agent in New York City in the same manner as aforesaid if (i) the Issuer shallhave appointed Paying Agents with specified offices outside the United States with thereasonable expectation that such Paying Agents would be able to make payment of theamounts on the Notes in the manner provided above when due, (ii) payment in full of suchamounts at all such offices is illegal or effectively precluded by exchange controls or othersimilar restrictions on payment or receipt of such amounts and (iii) such payment is thenpermitted by United States law, without involving, in the opinion of the Issuer, any adversetax consequence to the Issuer.

(c) Payments Subject to Laws: All payments are subject in all cases to any applicable laws,regulations and directives in the place of payment, but without prejudice to the provisions ofCondition 7. No commission or expenses shall be charged to the Noteholders orCouponholders in respect of such payments.

(d) Appointment of Agents: The Issuing and Paying Agent, the Paying Agents and theCalculation Agent initially appointed by the Issuer and the Guarantor and their respectivespecified offices are listed below. The Issuing and Paying Agent, the Paying Agents and the

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Calculation Agent act solely as agents of the Issuer and the Guarantor and do not assume anyobligation or relationship of agency or trust for or with any Noteholder or Couponholder. TheIssuer and the Guarantor reserve the right at any time with the approval of the Trustee tovary or terminate the appointment of the Issuing and Paying Agent, any other Paying Agentor the Calculation Agent(s) and to appoint additional or other Paying Agents, provided thatthe Issuer shall at all times maintain (i) an Issuing and Paying Agent, (ii) one or moreCalculation Agent(s) where the Conditions so require, (iii) such other agents as may berequired by any other stock exchange on which the Notes may be listed in each case, asapproved by the Trustee, and (iv) a Paying Agent with a specified office in a European Unionmember state that will not be obliged to withhold or deduct tax pursuant to EuropeanCouncil Directive 2003/48/EC or any law implementing or complying with, or introduced inorder to conform to, such Directive.

In addition, the Issuer and the Guarantor shall forthwith appoint a Paying Agent in New YorkCity in respect of any Notes denominated in U.S. dollars in the circumstances described inparagraph (b) above.

Notice of any such change or any change of any specified office shall promptly be given tothe Noteholders.

(e) Unmatured Coupons and Receipts and Unexchanged Talons:

(i) Upon the due date for redemption of Fixed Rate Notes (other than Dual Currency Notesor Index linked Notes) they should be surrendered for payment together with allunmatured Coupons (if any) relating thereto, failing which an amount equal to the facevalue of each missing unmatured Coupon (or, in the case of payment not being madein full, that proportion of the amount of such missing unmatured Coupon that the sumof principal so paid bears to the total principal due) shall be deducted from the FinalRedemption Amount, Early Redemption Amount or Optional Redemption Amount, asthe case may be, due for payment. Any amount so deducted shall be paid in themanner mentioned above against surrender of such missing Coupon within a period of10 years from the Relevant Date for the payment of such principal (whether or not suchCoupon has become void pursuant to Condition 8).

(ii) Upon the due date for redemption of any Floating Rate Note, Dual Currency InterestNote or Index Linked Note, unmatured Coupons relating to such Note (whether or notattached) shall become void and no payment shall be made in respect of them.

(iii) Upon the due date for redemption of any Note, any unexchanged Talon relating tosuch Note (whether or not attached) shall become void and no Coupon shall bedelivered in respect of such Talon.

(iv) Upon the due date for redemption of any Note that is redeemable in instalments, allReceipts relating to such Note having an Instalment Date falling on or after such duedate (whether or not attached) shall become void and no payment shall be made inrespect of them.

(v) Where any Note that provides that the relative unmatured Coupons are to become voidupon the due date for redemption of those Notes is presented for redemption withoutall unmatured Coupons, and where any Note is presented for redemption without anyunexchanged Talon relating to it, redemption shall be made only against the provisionof such indemnity as the Issuer may reasonably require.

(vi) If the due date for redemption of any Note is not a due date for payment of interest,interest accrued from the preceding due date for payment of interest or the InterestCommencement Date, as the case may be, shall only be payable against presentation(and surrender if appropriate) of the relevant Note. Interest accrued on a Note that only

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bears interest after its Maturity Date shall be payable on redemption of such Noteagainst presentation of the relevant Note.

(f) Talons: On or after the Interest Payment Date for the final Coupon forming part of a Couponsheet issued in respect of any Note, the Talon forming part of such Coupon sheet may besurrendered at the specified office of the Issuing and Paying Agent in exchange for a furtherCoupon sheet (and if necessary another Talon for a further Coupon sheet) (but excluding anyCoupons that may have become void pursuant to Condition 8).

(g) Non-Business Days: If any date for payment in respect of any Note, Receipt or Coupon is nota business day, the holder shall not be entitled to payment until the next following businessday nor to any interest or other sum in respect of such postponed payment. In this paragraph,“business day” means a day (other than a Saturday or a Sunday) on which banks andforeign exchange markets are open for business in the relevant place of presentation, in suchjurisdictions as shall be specified as “Financial Centres” hereon and:

(i) (in the case of a payment in a currency other than euro) where payment is to be madeby transfer to an account maintained with a bank in the relevant currency, on whichforeign exchange transactions may be carried on in the relevant currency in theprincipal financial centre of the country of such currency or

(ii) (in the case of a payment in euro) which is a TARGET Business Day.

7. Taxation

All payments of principal and interest by or on behalf of the Issuer or the Guarantor in respect ofthe Notes, the Receipts and the Coupons shall be made free and clear of, and without withholdingor deduction for, any taxes, duties, assessments or governmental charges of whatever natureimposed, levied, collected, withheld or assessed by or within the Cayman Islands or the United ArabEmirates or any Emirate therein or, in each case any authority therein or thereof having power totax, unless such withholding or deduction is required by law. In that event, the Issuer or, as the casemay be, the Guarantor shall pay such additional amounts as shall result in receipt by theNoteholders and Couponholders of such amounts as would have been received by them had nosuch withholding or deduction been required, except that no such additional amounts shall bepayable with respect to any Note, Receipt or Coupon:

(a) Other Connection: to, or to a third party on behalf of, a holder who is liable to such taxes,duties, assessments or governmental charges in respect of such Note, Receipt or Coupon byreason of his having some connection with the Cayman Islands or, in the case of payments bythe Guarantor, the United Arab Emirates or any Emirate therein other than the mere holdingof the Note, Receipt or Coupon; or

(b) Presentation more than 30 days after the Relevant Date: presented for payment morethan 30 days after the Relevant Date except to the extent that the holder of it would havebeen entitled to such additional amounts on presenting it for payment on the thirtieth day; or

(c) Payment to Individuals: where such withholding or deduction is imposed on a payment toan individual and is required to be made pursuant to European Council Directive 2003/48/ECor any law implementing or complying with, or introduced in order to conform to, suchDirective; or

(d) Payment by another Paying Agent: presented for payment by or on behalf of a holderwho would have been able to avoid such withholding or deduction by presenting the relevantNote, Receipt or Coupon to another Paying Agent in a Member State of the European Union.

As used in these Conditions, “Relevant Date” in respect of any Note, Receipt or Coupon meansthe date on which payment in respect of it first becomes due or (if any amount of the moneypayable is improperly withheld or refused) the date on which payment in full of the amount

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outstanding is made or (if earlier) the date seven days after that on which notice is duly given to theNoteholders that, upon further presentation of the Note, Receipt or Coupon being made inaccordance with the Conditions, such payment will be made, provided that payment is in fact madeupon such presentation. References in these Conditions to (i) “principal” shall be deemed toinclude any premium payable in respect of the Notes, all Instalment Amounts, Final RedemptionAmounts, Early Redemption Amounts, Optional Redemption Amounts, Amortised Face Amountsand all other amounts in the nature of principal payable pursuant to Condition 5 or any amendmentor supplement to it, (ii) “interest” shall be deemed to include all Interest Amounts and all otheramounts payable pursuant to Condition 4 or any amendment or supplement to it and (iii)“principal” and/or “interest” shall be deemed to include any additional amounts that may bepayable under this Condition or any undertaking given in addition to or in substitution for it underthe Trust Deed.

8. Prescription

Claims against the Issuer and/or the Guarantor for payment in respect of the Notes, Receipts andCoupons (which, for this purpose, shall not include Talons) shall be prescribed and become voidunless made within 10 years (in the case of principal) or five years (in the case of interest) from theappropriate Relevant Date in respect of them.

9. Events of Default

If any of the following events (“Events of Default”) occurs, the Trustee at its discretion may, and ifso requested by holders of at least one-fifth in nominal amount of the Notes then outstanding or ifso directed by an Extraordinary Resolution shall (subject in each case to being indemnified and/orsecured to its satisfaction), give notice to the Issuer that the Notes are, and they shall immediatelybecome, due and payable at their Early Redemption Amount together with accrued interest:

(a) Non-Payment: default is made for more than 14 days (in the case of interest) or seven days(in the case of principal) in the payment on the due date of interest or principal in respect ofany of the Notes; or

(b) Breach of Other Obligations: the Issuer or the Guarantor does not perform or comply withany one or more of its other obligations in the Notes or the Trust Deed which default isincapable of remedy or, if in the opinion of the Trustee capable of remedy, is not in theopinion of the Trustee remedied within 30 days after notice of such default shall have beengiven to the Issuer or the Guarantor by the Trustee; or

(c) Cross-Default: (i) any other present or future indebtedness of the Issuer, the Guarantor orany Material Subsidiary for or in respect of moneys borrowed or raised becomes due andpayable prior to its stated maturity by reason of any actual or potential default, event ofdefault or the like (howsoever described), or (ii) any such indebtedness is not paid when dueor, as the case may be, within any applicable grace period, or (iii) the Issuer, the Guarantor orany Material Subsidiary fails to pay when due any amount payable by it under any present orfuture guarantee for, or indemnity in respect of, any moneys borrowed or raised providedthat the aggregate amount of the relevant indebtedness, guarantees and indemnities inrespect of which one or more of the events mentioned above in this paragraph (c) haveoccurred equals or exceeds U.S.$50,000,000 or its equivalent (on the basis of the middle spotrate for the relevant currency against the U.S. Dollar as appointed by any leading bank on theday on which this paragraph operates); or

(d) Enforcement Proceedings: a distress, attachment, execution or other legal process is levied,enforced or sued out on or against all or (in the opinion of the Trustee) a material part of theproperty, assets or revenues of the Issuer, the Guarantor or any Material Subsidiary and is notdischarged or stayed within 60 days, unless such enforcement proceedings are being activelycontested in good faith by the Issuer; or

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(e) Security Enforced: any mortgage, charge, pledge, lien or other encumbrance, present orfuture, created or assumed by the Issuer, the Guarantor or any Material Subsidiary in respectof all or (in the opinion of the Trustee) a material part of the property, assets or revenues ofthe Issuer, the Guarantor or such Material Subsidiary, as the case may be, becomesenforceable and any step is taken to enforce it (including the taking of possession or theappointment of a receiver, administrative receiver, manager or other similar person); or

(f) Insolvency: any of the Issuer, the Guarantor or any Material Subsidiary is (or is, or could be,deemed by law or a court to be) insolvent or bankrupt or unable to pay its debts, stops,suspends or threatens to stop or suspend payment of all or (in the opinion of the Trustee) amaterial part of its debts, proposes or makes a general assignment or an arrangement orcomposition with or for the benefit of the relevant creditors in respect of any of such debts ora moratorium is agreed or declared in respect of or affecting all or any part of the debts ofthe Issuer, the Guarantor or any Material Subsidiary; or

(g) Winding-up: an order is made or an effective resolution passed for the winding-up ordissolution of the Issuer, the Guarantor or any Material Subsidiary, or the Issuer, theGuarantor or any Material Subsidiary ceases or threatens to cease to carry on all or (in theopinion of the Trustee) substantially all of its business or operations, in each case except forthe purpose of and followed by a reconstruction, amalgamation, reorganisation, merger orconsolidation (i) on terms approved by the Trustee or by an Extraordinary Resolution of theNoteholders or (ii) in the case of a Material Subsidiary, whereby the undertaking and assets ofthe Material Subsidiary are transferred to or otherwise vested in the Guarantor or anotherSubsidiary; or

(h) Nationalisation: any step is taken by any person (acting otherwise than in a capacity asshareholder of Dubai Holding LLC) with a view to the seizure, compulsory acquisition,expropriation or nationalisation of all or (in the opinion of the Trustee) a material part of theassets of the Issuer, the Guarantor or any Material Subsidiary; or

(i) Authorisation and Consents: any action, condition or thing (including the obtaining oreffecting of any necessary consent, approval, authorisation, exemption, filing, licence, order,recording or registration) at any time required to be taken, fulfilled or done in order (i) toenable the Issuer and the Guarantor lawfully to enter into, exercise their respective rights andperform and comply with their respective obligations under the Notes and the Trust Deed, (ii)to ensure that those obligations are legally binding and enforceable and (iii) to make theNotes and the Trust Deed admissible in evidence in the courts of the Cayman Islands and theUnited Arab Emirates or any Emirate therein is not taken, fulfilled or done; or

(j) Illegality: it is or will become unlawful for the Issuer or the Guarantor to perform or complywith any one or more of its obligations under any of the Notes or the Trust Deed; or

(k) Analogous Events: any event occurs that under the laws of any relevant jurisdiction has ananalogous effect to any of the events referred to in any of the foregoing paragraphs; or

(l) Guarantee: the Guarantee is not (or is claimed by the Guarantor not to be) in full force andeffect,

provided that (other than in the case of paragraphs (a) and (c) and (in the case of the Issuer or theGuarantor) paragraphs (f) and (g)) the Trustee shall have certified that in its opinion such event ismaterially prejudicial to the interests of the Noteholders.

For the purpose of this Condition:

“Consolidated Operating Profit” means the operating profit of the Guarantor for the mostrecent financial year as shown in the latest audited consolidated financial statements of theGuarantor and its Subsidiaries (or until publication of the first such audited consolidated financialstatements, the audited combined financial statements of the Guarantor (the “Combined FinancialStatements”) for the year ended 31 December 2005);

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“Consolidated Total Net Assets” means the aggregate amount of total assets of the Guarantor,after deducting therefrom (i) all current liabilities and (ii) all intangible assets, as at the end of themost recent financial year as shown in the latest audited consolidated financial statements of theGuarantor and its Subsidiaries (or until publication of the first such audited consolidated financialstatements, the Combined Financial Statements);

“Material Subsidiary” means any Subsidiary:

(i) whose Operating Profit or whose Total Net Assets represent not less than 10% of theConsolidated Operating Profit, or, as the case may be, the Consolidated Total Net Assets ofthe Guarantor and its Subsidiaries taken as a whole; provided that in the case of a Subsidiaryacquired after the end of the financial period to which the then latest audited consolidatedfinancial statements of the Guarantor relate or, as the case may be, the Combined FinancialStatements relate, in applying each of the above tests the reference in the relevant definedterms to the latest audited consolidated financial statements or, as the case may be, theCombined Financial Statements, for the financial period in which the acquisition is made havebeen prepared and audited as aforesaid, shall be deemed to be a reference to such firstmentioned financial statements or Combined Financial Statements as if such Subsidiary hadbeen shown in such financial statements or, as the case may be, Combined FinancialStatements by reference to its then latest relevant financial statements or, as the case may be,Combined Financial Statements, adjusted as deemed appropriate (as defined in the TrustDeed) by the Auditors after consultation with the Guarantor; or

(ii) to which is transferred all or substantially all of the business, undertaking and assets ofanother Subsidiary which immediately prior to such transfer is a Material Subsidiary,whereupon (a) in the case of a transfer by a Material Subsidiary, the transferor MaterialSubsidiary shall immediately cease to be a Material Subsidiary and (b) the transfereeSubsidiary shall immediately become a Material Subsidiary, provided that on or after the dateon which the financial statements for the financial period current at the date of such transferare published, whether such transferor Subsidiary or such transferee Subsidiary is or is not aMaterial Subsidiary shall be determined pursuant to the provisions of sub-paragraph (i) above;

“Operating Profit” means, in relation to a Subsidiary, its operating profit (consolidated in the caseof a Subsidiary which itself has subsidiaries) for the most recent financial year as shown in suchSubsidiary’s latest annual audited or unaudited, as the case may be, financial statements(consolidated in the case of a Subsidiary which itself has subsidiaries); and

“Total Net Assets” means, in relation to a Subsidiary, its total assets after deducting therefrom (i)all current liabilities and (ii) all intangible assets (consolidated in the case of a Subsidiary which itselfhas subsidiaries), as at the end of the most recent financial year as shown in its latest annualaudited or unaudited, as the case may be financial statements (consolidated in the case of aSubsidiary which itself has subsidiaries).

A report by two duly authorised officers of the Guarantor that in their opinion (making suchadjustments (if any) as they shall deem appropriate) a Subsidiary is or is not or was or was not atany particular time or during any particular period a Material Subsidiary shall, in the absence ofmanifest error, be conclusive and binding on the Issuer, the Guarantor, the Trustee and theNoteholders.

10. Meetings of Noteholders, Modification, Waiver and Substitution

(a) Meetings of Noteholders: The Trust Deed contains provisions for convening meetings ofNoteholders to consider any matter affecting their interests, including the sanctioning byExtraordinary Resolution of a modification of any of these Conditions or any provisions of theTrust Deed. Such a meeting may be convened by Noteholders holding not less than 10% innominal amount of the Notes for the time being outstanding. The quorum for any meetingconvened to consider an Extraordinary Resolution shall be two or more persons holding or

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representing a clear majority in nominal amount of the Notes for the time being outstanding,or at any adjourned meeting two or more persons being or representing Noteholderswhatever the nominal amount of the Notes held or represented, unless the business of suchmeeting includes consideration of proposals, inter alia, (i) to amend the dates of maturity orredemption of the Notes, any Instalment Date or any date for payment of interest or InterestAmounts on the Notes, (ii) to reduce or cancel the nominal amount of, or any InstalmentAmount of, or any premium payable on redemption of, the Notes, (iii) to reduce the rate orrates of interest in respect of the Notes or to vary the method or basis of calculating the rateor rates or amount of interest or the basis for calculating any Interest Amount in respect ofthe Notes, (iv) if a Minimum and/or a Maximum Rate of Interest, Instalment Amount orRedemption Amount is shown hereon, to reduce any such Minimum and/or Maximum, (v) tovary any method of, or basis for, calculating the Final Redemption Amount, the EarlyRedemption Amount or the Optional Redemption Amount, including the method ofcalculating the Amortised Face Amount, (vi) to vary the currency or currencies of payment ordenomination of the Notes, or (vii) to modify the provisions concerning the quorum requiredat any meeting of Noteholders or the majority required to pass the Extraordinary Resolution,or (viii) to modify or cancel the Guarantee, in which case the necessary quorum shall be twoor more persons holding or representing not less than 75%, or at any adjourned meeting notless than 25%, in nominal amount of the Notes for the time being outstanding. AnyExtraordinary Resolution duly passed shall be binding on Noteholders (whether or not theywere present at the meeting at which such resolution was passed) and on all Couponholders.

(b) Modification of the Trust Deed: The Trustee may agree, without the consent of theNoteholders or Couponholders, to (i) any modification of any of the provisions of the TrustDeed that, in its opinion, is of a formal, minor or technical nature or is made to correct amanifest error, and (ii) any other modification (except as mentioned in the Trust Deed), andany waiver or authorisation of any breach or proposed breach, of any of the provisions of theTrust Deed that is in the opinion of the Trustee not materially prejudicial to the interests ofthe Noteholders. Any such modification, authorisation or waiver shall be binding on theNoteholders and the Couponholders and, if the Trustee so requires, such modification shall benotified to the Noteholders as soon as practicable.

(c) Substitution: The Trust Deed contains provisions permitting the Trustee to agree, subject tosuch amendment of the Trust Deed and such other conditions as the Trustee may require, butwithout the consent of the Noteholders or the Couponholders, to the substitution of theIssuer’s successor in business (as defined in the Trust Deed) or any subsidiary of the Issuer orits successor in business or of the Guarantor or its successor in business or any subsidiary ofthe Guarantor or its successor in business in place of the Issuer or Guarantor, or of anyprevious substituted company, as principal debtor or Guarantor under the Trust Deed and theNotes. In the case of such a substitution the Trustee may agree, without the consent of theNoteholders or the Couponholders, to a change of the law governing the Notes, the Receipts,the Coupons, the Talons and/or the Trust Deed provided that such change would not in theopinion of the Trustee be materially prejudicial to the interests of the Noteholders.

(d) Entitlement of the Trustee: In connection with the exercise of its functions (including butnot limited to those referred to in this Condition) the Trustee shall have regard to the interestsof the Noteholders as a class and shall not have regard to the consequences of such exercisefor individual Noteholders or Couponholders and the Trustee shall not be entitled to require,nor shall any Noteholder or Couponholder be entitled to claim, from the Issuer or theGuarantor any indemnification or payment in respect of any tax consequence of any suchexercise upon individual Noteholders or Couponholders.

11. Enforcement

At any time after the Notes become due and payable, the Trustee may, at its discretion and withoutfurther notice, institute such proceedings against the Issuer and/or the Guarantor as it may think fit

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to enforce the terms of the Trust Deed, the Notes, the Receipts and the Coupons, but it need nottake any such proceedings unless (a) it shall have been so directed by an Extraordinary Resolution orso requested in writing by Noteholders holding at least one-fifth in nominal amount of the Notesoutstanding, and (b) it shall have been indemnified and/or secured to its satisfaction. NoNoteholder, Receiptholder or Couponholder may proceed directly against the Issuer or theGuarantor unless the Trustee, having become bound so to proceed, fails to do so within areasonable time and such failure is continuing.

12. Indemnification of the Trustee

The Trust Deed contains provisions for the indemnification of the Trustee and for its relief fromresponsibility. The Trustee is entitled to enter into business transactions with the Issuer, theGuarantor and any entity related to the Issuer or the Guarantor without accounting for any profit.

13. Replacement of Notes, Receipts, Coupons and Talons

If a Note, Receipt, Coupon or Talon is lost, stolen, mutilated, defaced or destroyed, it may bereplaced, subject to applicable laws, regulations and stock exchange or other relevant authorityregulations, at the specified office of the Issuing and Paying Agent in Luxembourg or such otherPaying Agent as may from time to time be designated by the Issuer for the purpose and notice ofwhose designation is given to Noteholders, in each case on payment by the claimant of the fees andcosts incurred in connection therewith and on such terms as to evidence, security and indemnity(which may provide, inter alia, that if the allegedly lost, stolen or destroyed Note, Receipt, Couponor Talon is subsequently presented for payment or, as the case may be, for exchange for furtherCoupons, there shall be paid to the Issuer on demand the amount payable by the Issuer in respectof such Notes, Receipts, Coupons or further Coupons) and otherwise as the Issuer may reasonablyrequire. Mutilated or defaced Notes, Receipts, Coupons or Talons must be surrendered beforereplacements will be issued.

14. Further Issues

The Issuer may from time to time without the consent of the Noteholders or Couponholders createand issue further securities either having the same terms and conditions as the Notes in all respects(or in all respects except for the first payment of interest on them) and so that such further issueshall be consolidated and form a single series with the outstanding securities of any series (includingthe Notes) or upon such terms as the Issuer may determine at the time of their issue. References inthese Conditions to the Notes include (unless the context requires otherwise) any other securitiesissued pursuant to this Condition and forming a single series with the Notes. Any further securitiesforming a single series with the outstanding securities of any series (including the Notes) constitutedby the Trust Deed or any deed supplemental to it shall, and any other securities may (with theconsent of the Trustee), be constituted by the Trust Deed. The Trust Deed contains provisions forconvening a single meeting of the Noteholders and the holders of securities of other series wherethe Trustee so decides.

15. Notices

Notices to Noteholders shall be valid if published in a daily newspaper of general circulation inLondon (which is expected to be the Financial Times) and so long as the Notes are listed on theDubai International Financial Exchange (the “DIFX”), notified to the market through CANDI(Corporate Action News Disclosure for Issuers operated by the DIFX). If, in the opinion of theTrustee, any such publication is not practicable, notice shall be validly given if published in anotherleading daily English language newspaper with general circulation in Europe. The Issuer shall alsoensure that notices are duly published in a manner that complies with the rules of any stockexchange or other relevant authority on which the Notes are for the time being or by which theyhave for the time being admitted to trading.

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Any such notice shall be deemed to have been given on the date of such publication or, if publishedmore than once or on different dates, on the first date on which publication is made, as providedabove.

Couponholders shall be deemed for all purposes to have notice of the contents of any notice givento the Noteholders in accordance with this Condition.

16. Contracts (Rights of Third Parties) Act 1999

No person shall have any right to enforce any term or condition of the Notes under the Contracts(Rights of Third Parties) Act 1999.

17. Governing Law and Jurisdiction

(a) Governing Law: The Trust Deed, the Notes, the Receipts, the Coupons and the Talons aregoverned by, and shall be construed in accordance with, English law.

(b) Jurisdiction: The Courts of England are to have jurisdiction to settle any disputes that mayarise out of or in connection with any Notes, Receipts, Coupons or Talons or the Guaranteeand accordingly any legal action or proceedings arising out of or in connection with anyNotes, Receipts, Coupons or Talons or the Guarantee (“Proceedings”) may be brought insuch courts. Each of the Issuer and the Guarantor has in the Trust Deed irrevocably submittedto the jurisdiction of such courts.

(c) Service of Process: Each of the Issuer and the Guarantor has in the Trust Deed irrevocablyappointed an agent in England to receive, for it and on its behalf, service of process in anyProceedings in England.

(d) Waiver: The Guarantor irrevocably agrees that, should any Proceedings be taken anywhere(whether for any injunction, specific performance, damages or otherwise), no immunity (tothe extent that it may at any time exist, whether on the grounds of sovereignty or otherwise)in relation to those Proceedings (including without limitation, immunity from the jurisdictionof any court or tribunal, suit, service of process, injunctive or other interim relief, any order forspecific performance, any order for recovery of land, any attachment (whether in aid ofexecution, before judgment or otherwise) of its assets, any process for execution of anyaward or judgment or other legal process) shall be claimed by it or on its behalf or withrespect to its assets, any such immunity being irrevocably waived. The Guarantor irrevocablyagrees that it and its assets are, and shall be, subject to such Proceedings, attachment orexecution in respect of its obligations under the Guarantee.

(e) Consent: The Guarantor irrevocably and generally consents in respect of any Proceedingsanywhere to the giving of any relief or the issue of any process in connection with thoseProceedings including, without limitation, the making, enforcement or execution against anyassets whatsoever (irrespective of their use or intended use) of any order or judgment whichmay be made or given in those Proceedings.

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Summary of Provisions Relating to the Notes While in Global Form

Initial Issue of Notes

Global Notes may be delivered on or prior to the original issue date of the Tranche with a commondepositary for Euroclear and Clearstream, Luxembourg (the “Common Depositary”).

Upon the initial deposit of a Global Note with the Common Depositary, Euroclear or Clearstream,Luxembourg will credit each subscriber with a nominal amount of Notes equal to the nominalamount thereof for which it has subscribed and paid.

Notes that are initially deposited with the Common Depositary may also be credited to the accountsof subscribers with (if indicated in the relevant Final Terms) other clearing systems through direct orindirect accounts with Euroclear and Clearstream, Luxembourg held by such other clearing systems.Conversely, Notes that are initially deposited with any other clearing system may similarly becredited to the accounts of subscribers with Euroclear, Clearstream, Luxembourg or other clearingsystems.

Relationship of Accountholders with Clearing Systems

Each of the persons shown in the records of Euroclear, Clearstream, Luxembourg or any otherclearing system (“Alternative Clearing System”) as the holder of a Note represented by a GlobalNote must look solely to Euroclear, Clearstream, Luxembourg or any such Alternative ClearingSystem (as the case may be) for his share of each payment made by the Issuer to the bearer of suchGlobal Note and in relation to all other rights arising under the Global Notes, subject to and inaccordance with the respective rules and procedures of Euroclear, Clearstream, Luxembourg, orsuch Alternative Clearing System (as the case may be). Such persons shall have no claim directlyagainst the Issuer in respect of payments due on the Notes for so long as the Notes are representedby such Global Note and such obligations of the Issuer will be discharged by payment to the bearerof such Global Note in respect of each amount so paid.

Exchange

Temporary Global Notes

Each Temporary Global Note will be exchangeable, free of charge to the holder, on or after itsExchange Date:

(i) if the relevant Final Terms indicates that such Global Note is issued in compliance with the CRules or in a transaction to which TEFRA is not applicable, in whole, but not in part, for theDefinitive Notes defined and described below; and

(ii) otherwise, in whole or in part upon certification as to non-U.S. beneficial ownership in theform set out in the Agency Agreement for interests in a Permanent Global Note or, if soprovided in the relevant Final Terms, for Definitive Notes.

Permanent Global Notes

Each Permanent Global Note will be exchangeable, free of charge to the holder, on or after itsExchange Date in whole but not, except as provided under “Partial Exchange of Permanent GlobalNotes” below, in part for Definitive Notes if the Permanent Global Note is held on behalf ofEuroclear or Clearstream, Luxembourg or an Alternative Clearing System and any such clearingsystem is closed for business for a continuous period of 14 days (other than by reason of holidays,statutory or otherwise) or announces an intention permanently to cease business or does in fact doso.

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In the event that a Global Note is exchanged for Definitive Notes, such Definitive Notes shall beissued in Specified Denomination(s) only. A Noteholder who holds a principal amount of less thanthe minimum Specified Denomination will not receive a Definitive Note in respect of such holdingand would need to purchase a principal amount of Notes such that it holds an amount equal to oneor more Specified Denominations.

Partial Exchange of Permanent Global Notes

For so long as a Permanent Global Note is held on behalf of a clearing system and the rules of thatclearing system permit, such Permanent Global Note will be exchangeable in part on one or moreoccasions if so provided in, and in accordance with, the Conditions (which will be set out in therelevant Final Terms) relating to Partly Paid Notes.

Delivery of Notes

On or after any due date for exchange the holder of a Global Note may surrender such Global Noteor, in the case of a partial exchange, present it for endorsement to or to the order of the Issuingand Paying Agent. In exchange for any Global Note, or the part thereof to be exchanged, the Issuerwill (i) in the case of a Temporary Global Note exchangeable for a Permanent Global Note, deliver,or procure the delivery of, a Permanent Global Note in an aggregate nominal amount equal to thatof the whole or that part of a Temporary Global Note that is being exchanged or, in the case of asubsequent exchange, endorse, or procure the endorsement of, a Permanent Global Note to reflectsuch exchange or (ii) in the case of a Global Note exchangeable for Definitive Notes, deliver, orprocure the delivery of, an equal aggregate nominal amount of duly executed and authenticatedDefinitive Notes. In this Prospectus, “Definitive Notes” means, in relation to any Global Note, thedefinitive Notes for which such Global Note may be exchanged (if appropriate, having attached tothem all Coupons and Receipts in respect of interest or Instalment Amounts that have not alreadybeen paid on the Global Note and a Talon). Definitive Notes will be security printed in accordancewith any applicable legal and stock exchange requirements in or substantially in the form set out inthe Schedules to the Trust Deed. On exchange in full of each Permanent Global Note, the Issuerwill, if the holder so requests, procure that it is cancelled and returned to the holder together withthe relevant Definitive Notes.

Exchange Date

“Exchange Date” means, in relation to a Temporary Global Note, the day falling after the expiry of40 days after its issue date and, in relation to a Permanent Global Note, a day falling not less than60 days after that on which the notice requiring exchange is given and on which banks are open forbusiness in the city in which the specified office of the Issuing and Paying Agent is located and inthe city in which the relevant clearing system is located.

Amendment to Conditions

The Temporary Global Notes and Permanent Global Notes contain provisions that apply to the Notesthat they represent, some of which modify the effect of the terms and conditions of the Notes setout in this Prospectus. The following is a summary of certain of those provisions:

Payments

No payment falling due after the Exchange Date will be made on any Global Note unless exchangefor an interest in a Permanent Global Note or for Definitive Notes is improperly withheld or refused.Payments on any Temporary Global Note issued in compliance with the D Rules before theExchange Date will only be made against presentation of certification as to non-U.S. beneficialownership in the form set out in the Agency Agreement. All payments in respect of Notesrepresented by a Global Note will be made against presentation for endorsement and, if no furtherpayment falls to be made in respect of the Notes, surrender of that Global Note to or to the order

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of the Issuing and Paying Agent or such other Paying Agent as shall have been notified to theNoteholders for such purpose. A record of each payment so made will be endorsed on each GlobalNote, which endorsement will be prima facie evidence that such payment has been made in respectof the Notes. Condition 6(d)(v) and Condition 7(d) will apply to the Definitive Notes only.

Prescription

Claims against the Issuer in respect of Notes that are represented by a Permanent Global Note willbecome void unless it is presented for payment within a period of 10 years (in the case of principal)and five years (in the case of interest) from the appropriate Relevant Date (as defined in Condition7).

Meetings

The holder of a Permanent Global Note shall (unless such Permanent Global Note represents onlyone Note) be treated as being two persons for the purposes of any quorum requirements of ameeting of Noteholders and, at any such meeting, as having one vote in respect of each integralcurrency unit of the Specified Currency of the Notes.

Cancellation

Cancellation of any Note represented by a Permanent Global Note that is required by the Conditionsto be cancelled (other than upon its redemption) will be effected by reduction in the nominalamount of the relevant Permanent Global Note.

Purchase

Notes represented by a Permanent Global Note may only be purchased by the Issuer, the Guarantoror any other Subsidiary if they are purchased together with the rights to receive all future paymentsof interest and Instalment Amounts (if any) thereon.

Issuer’s Option

Any option of the Issuer provided for in the Conditions of any Notes while such Notes arerepresented by a Permanent Global Note shall be exercised by the Issuer giving notice to theNoteholders within the time limits set out in and containing the information required by theConditions, except that the notice shall not be required to contain the serial numbers of Notesdrawn in the case of a partial exercise of an option and accordingly no drawing of Notes shall berequired. In the event that any option of the Issuer is exercised in respect of some but not all of theNotes of any Series, the rights of accountholders with a clearing system in respect of the Notes willbe governed by the standard procedures of Euroclear, Clearstream, Luxembourg or any otherclearing system (as the case may be).

Noteholders’ Options

Any option of the Noteholders provided for in the Conditions of any Notes while such Notes arerepresented by a Permanent Global Note may be exercised by the holder of the Permanent GlobalNote giving notice to the Issuing and Paying Agent within the time limits relating to the deposit ofNotes with a Paying Agent set out in the Conditions substantially in the form of the notice availablefrom any Paying Agent, except that the notice shall not be required to contain the serial numbers ofthe Notes in respect of which the option has been exercised, and stating the nominal amount ofNotes in respect of which the option is exercised and at the same time presenting the PermanentGlobal Note to the Issuing and Paying Agent, or to a Paying Agent acting on behalf of the Issuingand Paying Agent, for notation.

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Trustee’s Powers

In considering the interests of Noteholders while any Global Note is held on behalf of a clearingsystem, the Trustee may have regard to any information provided to it by such clearing system or itsoperator as to the identity (either individually or by category) of its accountholders with entitlementsto such Global Note and may consider such interests as if such accountholders were the holders ofthe Notes represented by such Global Note.

Notices

So long as any Notes are represented by a Global Note and such Global Note is held on behalf of aclearing system, notices to the holders of Notes of that Series may be given by delivery of therelevant notice to that clearing system for communication by it to entitled accountholders insubstitution for publication as required by the Conditions or by delivery of the relevant notice to theholder of the Global Note.

Partly Paid Notes

The provisions relating to Partly Paid Notes are not set out in this Prospectus, but will be containedin the relevant Final Terms and thereby in the Global Notes. While any instalments of thesubscription moneys due from the holder of Partly Paid Notes are overdue, no interest in a GlobalNote representing such Notes may be exchanged for an interest in a Permanent Global Note or forDefinitive Notes (as the case may be). If any Noteholder fails to pay any instalment due on any PartlyPaid Notes within the time specified, the Issuer may forfeit such Notes and shall have no furtherobligation to their holder in respect of them.

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Use of Proceeds

The net proceeds that the Issuer will receive from the sale of the Notes will be lent on an intra-group basis to the Guarantor which will use the proceeds for its general corporate purposes,including refinancing of existing indebtedness.

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The Issuer

The Issuer was incorporated on 20 November 2006 as an exempted company under the laws of theCayman Islands. The Issuer’s registered office is located at the offices of Paget-Brown TrustCompany Ltd., West Wind Building, Harbour Drive, P.O. Box 1111, George Town, Grand Cayman,Cayman Islands and its telephone number is +1 345 949 5122. Its authorised share capital isU.S.$50,000 and its issued share capital is U.S.$250.00 divided into 250 ordinary shares ofU.S.$1.00 each. All of the issued share capital of the Issuer is held by the Company.

The Issuer’s principal purpose is to issue Notes under the Programme guaranteed by the Company.The Issuer has not conducted operations since its inception and has no subsidiaries or significantbusiness other than the issuance of the Notes and is not expected to have any income exceptpayments received from the Company which will be the only material sources of funds available tomeet the claims of the holders of the Notes.

Articles of Association and Memorandum of Association of Dubai Holding CommercialOperations MTN Limited

The articles of association and memorandum of association of the Issuer permit the Issuer to issuethe Notes and provide financing for the Company as described herein.

Management of the Issuer

Dubai Holding Commercial Operations MTN Limited’s board of directors is made up of fourdirectors: H.E. Mohammad Al Gergawi, Mr. Fadel Al Ali, Mr. Hashim Al Dabal and Mr. SaudBaAlawy. In addition to their duties as directors of the Issuer, H.E. Al Gergawi is the ExecutiveChairman of Dubai Holding LLC, Mr. Al Ali is the Chief Financial and Operating Officer of DubaiHolding LLC, Mr. Al Dabal is the Chief Executive Officer of Dubai Properties LLC and Mr. BaAlawy isthe Chief Executive Officer of Dubai Investment Group. The business address of each member of theboard of directors is c/o Dubai Holding LLC, P.O. Box 66000, Level 38, Emirates Towers (offices),Sheikh Zayed Road, Dubai, United Arab Emirates.

As at the date of this Prospectus, there are no actual or potential conflicts of interest between anyduties of the directors to the Issuer and their duties in respect of their other directorships or theirprivate interests.

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The Company

Overview

The Company is the holding company of a diverse group of companies with principal operationscovering domestic and international real estate, hospitality and leisure and telecommunications. It isone of the largest infrastructure and property development companies in Dubai and the MiddleEast. Through its activities, the Company has contributed to the success of Dubai as a touristdestination and business hub by developing many of its landmark properties such as the Burj AlArab, Jumeirah Beach Hotel and Emirates Towers (Dubai’s iconic buildings) and has pioneered thedevelopment of free zones (areas of land granted special rights by the Government of Dubai withthe specific purpose of facilitating foreign investment) such as Dubai Internet City, Dubai MediaCity, Dubai Knowledge Village and Dubai Healthcare City. The Company is also involved in thedevelopment of many large scale ongoing projects which will be completed in the next three to fiveyears such as Dubailand (an entertainment, leisure and residential area) as well as master-plannedlifestyle and business communities (large communities which are built in accordance with a singlescheme, even though they might be developed in stages, and comprise a range of amenities) suchas The Lagoons, Jumeirah Beach Residences, Business Bay and The Villa (as further described below).

The Company is instrumental in the execution of the Government of Dubai’s economic agenda of (i)diversifying the economy away from the oil industry into real estate, tourism, media andtelecommunications, as well as financial, manufacturing and commercial services; (ii) enhancing therole of the private sector and further promoting foreign investment; (iii) allowing foreigners to ownproperty on a freehold and long term lease basis; and (iv) establishing free zones aimed at attractingforeign entities to set up offices in Dubai for their regional operations encompassing the Gulf, theIndian sub-continent, the Levant and North Africa. While most of its current developments arelocated in Dubai, the Company has taken strategic steps to expand regionally by developing realestate projects in countries such as Oman, Bahrain, Qatar, Turkey and Morocco.

The Company was incorporated on 29 October 2006 as part of the re-organisation of thesubsidiaries of Dubai Holding LLC (“Dubai Holding”) in order to segregate clearly operatingactivities from investment activities. The Company is owned as to 99.67% by Dubai Holding and asto 0.33% by TECOM Investments FZ LLC. Dubai Holding is owned as to 99.67% by His HighnessSheikh Mohammed Bin Rashid Al Maktoum.

The Company’s network of business activities provides it with a constant revenue stream and strongasset base. For the year ended 31 December 2005, its total revenues were AED 2.645 billion and itsEBITDA was AED 1.478 billion. These figures are derived from the combined financial statements ofthe Company’s commercial operating subsidiaries (as described below) for the year ended 31December 2005. The Company’s first set of consolidated financial statements will be produced forthe year ended 31 December 2006.

For the year ended 31 December 2005, the Company’s main sources of revenue were from itshospitality and leisure operations, real estate projects and the sale of land followed by income fromits investments, as set out in the table below:

Year ended 31 December 2005Source of total revenue of Company11111111111112

Sector (%)Hospitality and Leisure........................................................................ 43.7Real Estate.......................................................................................... 23.8Land Sales .......................................................................................... 16.6Technology ........................................................................................ 6.9Services .............................................................................................. 3.4Commercials & Sponsorships .............................................................. 3.2Investment Income ............................................................................ 1.8Other.................................................................................................. 0.5

The Company receives its revenues from the following commercial operating subsidiaries which arelisted in order of their total revenues for the year ended 31 December 2005:

(i) Dubai Properties LLC - a real estate developer of several large projects including Business Bay,Jumeirah Beach Residences, The Villa and Culture Village;

(ii) TECOM Investments LLC - a developer of substantial free zone real estate in Dubai includingDubai Internet City, Dubai Media City and Dubai Knowledge Village and has also madesubstantial investments in the telecommunications sector both locally and overseas;

(iii) Jumeirah Group LLC - a hospitality and leisure company which both owns and managesseveral key hotels and commercial properties in Dubai including the Burj Al Arab, EmiratesTowers, Jumeirah Beach Hotel, the Jumeirah Beach Club, Madinat Jumeirah and also managesother hotels and commercial properties such as Bab al Shams, The Carlton Towers and TheLowndes Hotel in London as well as Essex House in New York. It also set up the EmiratesAcademy of Hospitality Management, the first hospitality training institute in Dubai;

(iv) SAMA Dubai LLC - previously known as Dubai International Properties LLC, SAMA Dubai LLCfocuses on international real estate projects. Current projects under development include theDubai Towers (which are business developments in Turkey and Qatar), the Salam Resorts andSpas (luxury hotels in Oman and Bahrain) and Amwaj (a comprehensive urban development inMorocco); and

(v) Tatweer Dubai LLC - a company set up to own and manage a large portfolio of real estateprojects such as Dubailand, Dubai Healthcare City (a free zone for the healthcare industry),Dubai Industrial City and the Dubai Mercantile Exchange (Dubai’s first energy futuresexchange) (set up as a joint venture with the New York Mercantile Exchange).

History

The following timeline shows the evolution of the Company and certain of its subsidiaries:

• Dubai Healthcare City launched

• Jumeirah Beach Residences launched

• Dubai Properties, Dubai International Properties (now SAMA Dubai) established

• Establishment of the Company

<2001 2002 2003 2004 2005 2006

• Jumeirah Group created 1997• Dubai Internet City and Dubai Media City launched in 2000, forming TECOM Investments

• Jumeirah Group becomes part of Dubai Holding LLC• Business Bay launched

• Tatweer launches Dubailand and Dubai Mercantile Exchange scheduled to be launched in early 2007• Dubai International Properties renamed SAMA Dubai• SAMA Dubai launches The Lagoons

• Tatweer established and Dubai Industrial City launched

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Group structure

The following diagram shows the operational structure of the Company as at the date of thisProspectus:

* These hotels are managed but not owned by Jumeirah Group LLC.

Many of the Company’s real estate projects are currently being developed and are expected to becompleted over the next three to five years. Further detail on these projects is provided in thesection entitled “Subsidiaries” below.

Subsidiaries

TECOM

TECOM Investments FZ LLC (“TECOM”) was incorporated on 29 May 2001 as DIC Investments FZLLC and changed its name to TECOM Investments FZ LLC on 8 October 2002. TECOM was wholly-owned by Al Mada LLC, which is owned as to 99.66% by Dubai Holding. On 10 December 2006,ownership of all the shares in TECOM was transferred to TECOM Investments LLC, which wasincorporated on 14 February 2006 to consolidate the different interests of TECOM. TECOMInvestments LLC is owned as to 99.67% by the Company and as to 0.33% by Tecom InvestmentsFZ LLC. TECOM’s main objective is to encourage the growth of a “knowledge-based economy” inDubai by developing the information, technology and communication sector, the media sector andthe educational sector. It has set up three separate free zone clusters: Dubai Internet City (dedicated

Dubai InternetCity

Dubai Media City

Dubai KnowledgeVillage

Dubiotech

Dubai OutsourceZone

Int ’I Media &Production Zone

Dubai Studio City

Empower

e-hosting Datafort

Arab MediaGroup

Jumeirah BeachResidence

The Villa

Business Bay

Culture Village

DubaiProperties

LLC

SAMADubaiLLC

Dubai Tower

Salam Resort & Spas

Amwaj

The Lagoons

Burj Al Arab

Jumeirah BeachHotel

Jumeirah BeachClub

Madinat Jumeirah

Bab Al Shams*

Emirates Towers

TECOMInvestments

LLC

TatweerLLC

Dubailand

Dubai IndustrialCity

Dubai Healthcare City

Dubai Energy

Interoutetelecomsacquisitions

Maltacom

Axiom Telecom

du

Tunisie Telecom

Dubai MercantileExchange

JumeirahGroupLLC

Carlton Towers*

The Lowndes*

Essex House*

Emirates Academy of Hospitality Management

Dubai HoldingCommercial Operations

Group LLC

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to the information, communication and technology sector), Dubai Media City (dedicated to themedia industry) and Dubai Knowledge Village (dedicated to educational and training institutions).

TECOM has also set up the largest internet protocol infrastructure in the world covering andsupporting each of its free zones. This has now been transferred to Emirates IntegratedTelecommunications Company PJSC (“du”) in which TECOM has a major shareholding (see “-Telecommunications” below).

TECOM’s business activities can be separated into four areas (i) free zones; (ii) investments; (iii)telecommunications and (iv) media, as further described below.

For the year ended 31 December 2005, TECOM’s total revenues were approximately AED 1.535million (including release of deferred government grant income and government grant income) andits EBITDA was approximately AED 0.805 million.

Free zones

TECOM has set up the following free zones (which are designated areas of land granted specialrights by the Government of Dubai making them attractive to foreign investors, see “TECOM’sBusiness Model” below):

(i) Dubai Internet City

Dubai Internet City is the first complete information technology and telecommunications hubbuilt within a free trade zone and the biggest information technology infrastructure in theMiddle East. Its clients include multinational companies such as Microsoft, Siemens, Oracleand IBM. Dubai Internet City provides these companies with a strategic base from which tocarry out their operations in the Middle East and other emerging markets such as the Indiansub-continent, Africa and Central Asia.

(ii) Dubai Media City

Dubai Media City is a community built specifically for the media industry. Its clients includeleading companies in the international media business such as the Associated Press,Bertelsmann, CNN, CNBC, International Advertising Association (IAA), McGraw-Hill Platts,Sony, Reuters as well as regional media companies such as the Middle East BroadcastingCorporation, Saudi Research and Publishing and Taj TV.

(iii) Dubai Knowledge Village

As an educational hub built in a free zone, Dubai Knowledge Village has attracted a range ofeducational and training institutions including prominent universities from the UnitedKingdom (such as Manchester Business School and Middlesex University) and Australia (suchas the University of Wollongong and the SAE Institute) which offer advanced programmes inscience, technology, business, management and media.

Investments

TECOM has also made the following strategic investments:

(i) Emirates Central Cooling Systems Corporation (“Empower”)

Empower was established in December 2003 as a joint venture owned 50% by TECOM and50% by Dubai Electricity and Water Authority (“DEWA”). Empower will be engaged toprovide cooling services to various real estate projects of the Company such as JumeirahBeach Residences, Dubai Healthcare City and Business Bay as well as other entities that arenot owned or operated by the Company, such as the Dubai International Financial Centre.

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(ii) e-Hosting DataFort (“EHDF”)

EHDF was formed as a result of a merger in April 2003 of e-hosting FZ LLC and Datafort FZLLC and is a wholly owned subsidiary of TECOM. It is a managed hosting and IT securitycompany and offers services which secure companies’ IT infrastructure including co-location,managed hosting, a strategic outsourcing data centre, internal security auditing, disasterrecovery and business continuity services.

Telecommunications

TECOM also has a telecommunications portfolio which it has expanded by investing in bothestablished businesses and new ventures in the telecommunications industry worldwide. Theseinclude:

(i) the acquisition of a 30% shareholding in Interoute Telecom Holding Limited (“Interoute”) byTECOM Investments Overseas Limited (Cayman), a special purpose vehicle incorporated on 10August 2005. Interoute owns and manages one of the largest and most advanced voice anddata networks in Europe;

(ii) the acquisition of a 60% shareholding in Maltacom (as part of Maltacom’s privatisation as amobile and fixed telephone services provider) by Emirates International Telecommunications(Malta) Limited, a wholly owned subsidiary of Emirates International Telecommunications LLC(“EIT”). EIT was formed on 24 April 2006 as a joint venture vehicle between TECOM andDubai Investment Group LLC (“Dubai Investment Group”);

(iii) the acquisition of a 40% shareholding in Axiom Telecom LLC by TECOM on 5 December2005. Axiom Telecom LLC is a leading regional distributor of mobile telephones;

(iv) the acquisition of a 25% shareholding in du, the second mobile phone operator to beestablished in the UAE after Etisalat, by Emirates Communications and Technologies CompanyLLC (“ECTC”) on 31 December 2005. ECTC is owned by TECOM and TECOM InvestmentsLLC (5% of ECTC’s shareholding in du was sold to the public in 2006); and

(v) the acquisition of a 35% shareholding in Tunisie Telecom in May 2006 from the Governmentof Tunisia by Emirates International Telecommunication (Tunisia) FZ LLC (“EITT”), a specialpurpose vehicle which is wholly owned by EIT. Tunisie Telecom is a telecom service providerwhich has a monopoly over the fixed line telephone industry and a duopoly over the mobilephone industry in Tunisia. The sale of this shareholding by the Government of Tunisiarepresents the first stage of Tunisie Telecom’s privatisation.

The Government of Tunisia may, at its discretion, offer an additional 16% shareholding inTunisie Telecom. There is no certainty, at this stage, whether such an offer will be made asthis depends on whether the Government of Tunisia considers the first stage of theprivatisation to have been successful. It is also uncertain whether the offer will be made onlyto EITT or whether bids will be invited from other investors. However, if such an offer ismade, it is likely to be made before the end of March 2007. If this acquisition goes ahead,EITT will have a 51% shareholding in Tunisie Telecom, thereby giving it a controlling stake inthe company. TECOM expects to finance the acquisition initially through syndicated bankfacilities which may at some stage be refinanced by the issuance of debt to investors in thecapital markets.

Media

In addition, the Company has become a significant player in the media industry through theestablishment of the Arab Media Group (“AMG”), the largest media grouping in the UAE, on25 July 2005. AMG was owned as to 99.66% by Al Mada LLC and 0.34% by TECOM InvestmentsFZ LLC. On 19 December 2006, Al Mada LLC transferred its shares in AMG to TECOM Investments

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LLC. AMG owns the Arabian Radio Network, which currently operates and broadcasts via eightradio stations and Awraq Publishing, which runs three daily newspapers and a number ofmagazines. In addition, AMG established Done LLC, an events management company and ShoofLLC, specialising in advertising in outdoor media such as on billboards and in shopping malls. Eachof Done LLC and Shoof LLC are owned as to 99.66% by AMG and 0.34% by TECOM. In August2005, AMG acquired Al Bayan, Dubai’s official Arabic newspaper for the last 30 years.

TECOM’s Business Model

TECOM’s strengths and success can be attributed to its overall goal of pioneering new investmentideas and opportunities in Dubai. The following elements of its business model have enabled it toachieve that goal:

(i) Development of free zones

TECOM has been able to attract a strong foreign client base by setting up free zones. Freezones are areas of land which are granted special rights by the Government of Dubai with thespecific purpose of facilitating foreign investment. Companies established in free zones aretreated as being off shore and therefore outside the UAE for legal purposes. They are suitablefor companies intending to use Dubai as a base for a variety of activities includingdistribution, media publication and broadcasting. The free zones permit companies to have100% foreign ownership and exemption from import duties, a 100% repatriation of capitaland profits as well as the freedom to employ an overseas workforce.

TECOM expects to establish a number of other specialised free zones including:

(a) Dubai Outsource Zone - to provide the infrastructure for outsourcing companies whichservice the international market in sectors such as finance, accounting, informationtechnology and also to serve as a centre for disaster recovery facilities for call centreslocated elsewhere in the world.

(b) Dubiotech - a free zone dedicated to the biotechnology and pharmaceutical industry.Dubiotech will service the entire biotechnology industry, ranging from small companiesto regional offices of major biotechnology and pharmaceutical companies andmanufacturing plants and will facilitate government funded research and development.

(c) International Media Production Zone - the first free zone in the region dedicated tomedia-related production activities focusing on printing, publishing and packaging.

(d) Dubai Studio City - a project covering 22 million square feet and will includeproduction, post-production, equipment rental and satellite facilities as well as abusiness centre.

TECOM’s expertise in managing free zones has also led to international interest. TECOM hasbeen approached by regional governments to operate future free zone areas, such asSmartCity@Malta in partnership with SAMA Dubai LLC and Internet City in Cochin, India.

(ii) Providing a “one-stop shop” for international businesses in the free zones.

The Government of Dubai established the Dubai Technology and Media Free Zone Authority(“DTMFZA”) in 2000 in order to develop policies, standards and regulations with respect tothe free zones, administer regulations and immigration matters and issue free zone licencesand visas. TECOM has been mandated with the sole responsibility of operating and managingthe free zones controlled by the DTMFZA. This has enabled it to provide a “one-stop shop”for international businesses by arranging all their trade licences, visas, utilities andtelecommunications, thereby making the free zones more attractive to foreign investors. It hasalso enabled TECOM to control pricing within the free zones.

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Dubai Properties

Dubai Properties LLC (“DP”) was set up on 26 October 2004 in order to develop and manageseveral large real estate projects in Dubai. DP currently owns large portfolios of land granted to it bythe Government of Dubai and approximately 100 million square feet is currently underdevelopment, mainly comprising the large projects of Business Bay, Jumeirah Beach Residences, TheVilla and Culture Village.

DP’s objective is not only to build residential and commercial properties but to create master-planned lifestyle and business communities comprising large communities which are built inaccordance with a single scheme even though they may be developed in stages. Master-plannedcommunities are also intended to be self-contained by providing a range of amenities for itsresidents or occupants. Such amenities include retail, restaurant and entertainment facilitiessupported by a modern infrastructure of roads and recreational areas, as well as power, water andsewage facilities.

For the period from 26 October 2004 to 31 December 2005, DP’s total revenues wereapproximately AED 775 million (including transfer and late payment fees, release of governmentgrants, zoning fees and investment income) and its EBITDA was approximately AED 475 million.

DP’s principal real estate developments are described below:

(i) Business Bay

Business Bay is a large scale commercial project built over an area of 64 million square feetlocated along an extension of the Dubai Creek next to the Burj Dubai development. The firstphase will include 12 commercial and residential towers. This will include Executive Towers, adevelopment consisting of 10 high-rise freehold residential towers, one commercial tower,one luxury hotel tower and a two-level shopping mall. Business Bay will also feature VisionTower, a 51-storey skyscraper which will be a freehold office tower built on an area of592,000 square feet with office spaces ranging from 5,000 to 12,000 square feet each.Business Bay will offer state of the art amenities such as shops and restaurants, health clinics,health clubs and recreational facilities such as childrens playgrounds, parks, jogging tracks andswimming pools.

The first phase of the project was launched in 2005 and is scheduled to be delivered at theend of 2007. The second phase of the project will be launched in 2007 and is scheduled tobe delivered at the end of 2010.

(ii) Jumeirah Beach Residences

Launched at the end of 2002, Jumeirah Beach Residences is a U.S.$2 billion project covering22 million square feet of gross floor area on 1.7 km of Dubai’s Jumeirah Beach coastline,making it the largest single phase residential and commercial project in the world. It is beingdeveloped as a lifestyle and tourist destination and will comprise 36 luxury residentialapartment towers with approximately 6,700 apartments and four hotel towers. It is locatedon the north shore of the Dubai Marina, close to the Palm Jumeirah development and isdesigned to offer a year round beach resort lifestyle to its residents. Its luxury freeholdapartments come in a range of super premium penthouses, terrace apartments, duplexapartments, garden apartments, loft apartments and studio apartments. The apartments aredesigned so that they will have a view of either the Arabian Gulf, the landscaped innercourtyards of the development or of Dubai Marina. It will be a self-contained community forover 25,000 residents and will provide amenities such as restaurants, cineplexes, health clubs,sports centres, medical facilities, beach clubs, shops, supermarkets and nursery schools. Theproject is scheduled for completion in early 2007.

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(iii) The Villa

The Villa was launched at the end of 2005 as a freehold residential retreat built in Spanishstyle within the Dubailand development (see “Tatweer-Dubailand”). It covers an area of 29million square feet and comprises residences designed for outdoor living, comprising three,four and five bedroom courtyard villas with terraces that offer views of the surroundinglandscapes. It will be divided into four districts: The Haciendas, The Ponderosa, The Aldea andThe Centro. The Haciendas will contain exclusive villas with manicured gardens while ThePonderosa will offer ranch style living with private courtyards, villas, pools and fountains. TheAldea will consist of planned town housing and courtyards while The Centro will form thetown centre with shops, clubhouses and community facilities. It is scheduled for completion in2008.

(iv) Culture Village

Culture Village is intended to represent a blend of Middle Eastern history with the richheritage of Dubai through its mix of Arabic and old Dubai architecture. Its master plan hasbeen divided into residential, commercial and retail zones with hospitality and entertainmentsub-districts. The residential district will feature traditional low- to medium-rise buildingsoffering studios and one, two, three and four-bedroom apartments as well as loft-styleapartments. The commercial district will house cultural institutions, schools, academies for art,music and dance. The retail district will feature luxury hotels, exclusive restaurants as well asrare book shops and art galleries. A traditional souk with Arabic arts and crafts and traditionalspices and herbs will be the focal point of the retail district. It will also contain anamphitheatre for live performances and cultural festivals, an exhibition hall, museums and adockyard where dhows (traditional style trading boats) will be put on display. It will be builtalong the Dubai Creek covering an area of 40 million square feet. The first phase of theproject is expected to be launched in 2007 and is scheduled for completion in 2008.

Tatweer

Tatweer Dubai LLC (“Tatweer”) spearheads some of the most innovative projects in Dubai. It wasestablished on 30 October 2004 and has a diverse portfolio of projects ranging from tourism andentertainment to energy and healthcare. It oversees a number of major real estate projects such asDubailand, Dubai Healthcare City, Dubai Industrial City, Dubai Energy and Al-Bawadi. These projectsare still in their early stages of development. It is expected that they will be completed within thenext five to six years.

For the year ended 31 December 2005, Tatweer’s total revenues were approximately AED 106million (including release of government grants) and it had an EBITDA of approximately AED (-149)million. The negative EBITDA can be attributed to the fact that most of Tatweer’s projects had notor had only just begun construction for the year ended 31 December 2005.

Tatweer has the following major projects:

(i) Dubailand

Dubailand was launched in 2003. It was conceived as a large multi-purpose developmentcomprising not only master-planned communities but also a leisure resort divided into sixthemed worlds and will comprise over 200 individual projects spread over 2.5 billion squarefeet of land. It will feature sporting facilities, a theme park, eco-tourism resorts, museums,galleries, spas and shopping centres and is scheduled to be completed in 2010. It will alsoconsist of Al-Bawadi, a complex of 31 themed hotels covering an area of over 10 squarekilometres. Dubailand will also encompass The Villa, an exclusive residential communitydeveloped by DP (see “-Dubai Properties” above).

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1 The GCC includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.

(ii) Dubai Industrial City

Dubai Industrial City was launched in 2004 as an industrial zone comprising manufacturingfacilities in high value added sectors from the UAE, the countries of the Gulf Co-operationCouncil (“GCC”)1 and the Far East. It will occupy approximately 560 million square feet ofland and will include an industrial academy, a dedicated logistics park and a commercial area.Its objective is to make Dubai into a hub for industrial development. It is scheduled to becompleted in 2009.

(iii) Dubai Healthcare City (“DHCC”)

DHCC is a healthcare free zone and was launched in 2003. It has invited internationallyrespected institutions in health care delivery, education and research and development to co-locate on the site. Medical centres from the United Kingdom, Germany and the United Stateshave already committed to participate in DHCC. It has a 100% occupancy rate for its firstphase with 33 companies operating within the free zone.

DHCC has entered into a joint venture with Harvard Medical International to establish andmanage the Centre for Healthcare Planning and Quality which will develop procedures forhigh quality patient care throughout the DHCC. It will also set up the Harvard Medical SchoolDubai Centre to provide training in specialised medical services, life sciences and also carryout research and development.

(iv) Dubai Mercantile Exchange (“DME”)

The DME is a joint venture between Tatweer and the New York Mercantile Exchange, theworld’s largest physical commodity exchange. It will be the region’s first energy futuresexchange and has initial plans to list three types of contracts: Middle East based sour crudeoil, fuel oil and gold. It will be located in the Dubai International Financial Centre and will beregulated by the Dubai Financial Services Authority. It is scheduled to be launched in the firstquarter of 2007.

(v) The Lagoons

The Lagoons is a master-planned resort style community developed as a joint venture withSAMA Dubai LLC (see a description of The Lagoons in “SAMA Dubai” below).

SAMA Dubai

SAMA Dubai LLC (“SAMA Dubai”) focuses on developing master-planned urban residential andbusiness communities outside Dubai with a full range of amenities and it has made significant stepstowards expanding its scope to developing projects internationally. In addition to lifestyle andbusiness communities, it is developing a chain of high-end spas and resorts.

SAMA Dubai was incorporated as Dubai International Properties on 26 October 2004 and changedits name to SAMA Dubai LLC on 4 June 2006.

For the period from 26 October 2004 to 31 December 2005, it did not have any revenues and itsEBITDA was approximately AED (- 71) million. As with Tatweer, this can be attributed to the factthat most of SAMA Dubai’s projects had not yet or had only just commenced as at 31 December2005. SAMA Dubai’s major real estate projects are as follows:

(i) Dubai Towers, Doha

Dubai Towers, Doha will have over 80 storeys and will contain commercial offices, an upscaleretail shopping boulevard, a boutique hotel and serviced and unfurnished apartments. It isexpected to be launched in 2007 and to be completed in 2009.

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(ii) Dubai Towers, Turkey

Dubai Towers in Turkey will comprise a pair of 150 metre towers built in the Levent businessdistrict in Istanbul. It is expected to be launched in 2007 and will comprise a multi-usecomplex containing a five star hotel, luxury residences as well as shops and offices. It isscheduled for completion in 2010.

(iii) Salam Resorts & Spas, Oman and Bahrain

The Salam Resorts & Spas are a chain of luxury resorts which are currently being developed inYiti and Shinas in Oman and Bahrain, respectively. SAMA Dubai developed the “Salam”brand in order to offer a premium seven star hospitality service worldwide. The Salam resortin Bahrain won the title of “The World’s Leading Tourism Development Project” at the WorldTravel Awards in September 2006. It is located on the south-western coast of Bahrain. Theresort will cover an area of approximately 500,000 square metres and will feature luxuryhotels, a world-class spa, resort-style villas, apartments, an eco-centre as well as shopping anddining outlets. The Salam resort in Yiti will be a beachfront property set against a mountainrange. It will cover an area of 3.7 square kilometres and will include exclusive five star hotels,villas and apartments and will have modern sporting facilities including an 18 holechampionship golf course. The Salam resort in Shinas will also feature luxury hotels andlifestyle communities similar to the resort in Yiti. Both resorts in Oman are being developed inpartnership with the Government of Oman. The resorts in Yiti and Shinas are scheduled forcompletion in 2009 while the resort in Bahrain is scheduled for completion in 2010.

(iv) Amwaj, Morocco

Amwaj will comprise the first phase of the Bouregreg water metropolis in Rabat and will belaunched in the first quarter of 2007. It is a comprehensive urban project developed inpartnership with the local government. It will cover an area of 100 hectares and willencompass residential areas, approximately 200,000 square metres of office space withmodern facilities, five star hotels and resorts, a harbour for yachts, a convention centre and100,000 square metres of retail space as well as theatres. It is scheduled for completion in thesecond quarter of 2010.

(v) The Lagoons, UAE

Launched in 2006, The Lagoons is a multi-billion dollar capital investment owned andoperated as a joint venture between SAMA Dubai and Tatweer and will consist of residential,business and entertainment areas. It is situated on the Dubai Creek adjacent to the Ras AlKhor Wildlife Sanctuary and covers an area of over 6.5 million square metres. It consists ofseveral design areas with each design area having specific timing, construction and planningparameters. The Lagoons project is expected to be completed in 2010.

Residential accommodation will range from apartments to gated residential communities withschools, medical facilities and municipal centres serving each community. It will also containbusiness towers with premium office space. However, The Lagoons is not intended to besimply a residential and business zone but also to offer entertainment and resort style facilitiesto its customers. It will include a mall, a museum, an art centre, a theatre and a planetarium,as well as Dubai’s first opera house.

Although SAMA Dubai focuses on developing master-planned residential and businesscommunities outside Dubai, it is currently developing The Lagoons as, due to its operationsoverseas, it has acquired the necessary expertise in building resort-style communities whichwill be essential for the success for The Lagoons project.

A key element of SAMA Dubai’s strategy for developing projects overseas is predominantly to enterinto joint ventures or partnerships with local government entities in those countries such as with the

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Government of Oman for the development of the Yiti and Shinas resorts as well as with a localgovernment entity in Morocco for the development of Amwaj. This ensures that the project receivesthe necessary local support and expertise, that it is carried out in a timely manner and also helps tosecure a wide investor base.

Jumeirah Group LLC

Jumeirah Group LLC (“Jumeirah Group”) is an operator and manager of hotels and commercialproperties. It was established on 28 November 2004 under the name “Jumeirah Hospitality andLeisure LLC” and changed its name to “Jumeirah Group LLC” on 29 November 2005. JumeirahInternational LLC was established on 11 November 2001 although several of its assets have been inexistence prior to that date, beginning with the establishment of the Jumeirah Beach Club in 1997.The assets were consolidated in 2001 under Jumeirah International LLC and were then transferredto Jumeirah Group in 2004. Its properties such as the Burj Al Arab and Jumeirah Beach Hotel areregarded as among the most luxurious in the world. It has won numerous awards, such as theaward for being “The Middle East’s Leading Hotel Brand” at the World Travel Awards in November2005, while Burj Al Arab took the prize as “The World’s Leading Hotel” and “The World’s LeadingAll Suite Hotel”. In September 2006, it won the accolade of “Best Business Hotel Chain in theMiddle East” from the Business Traveller magazine in the United Kingdom and “Best Business HotelChain in the Middle East/Africa” for the third consecutive year at the annual Business Traveller AsiaPacific Awards.

The portfolio of assets of Jumeirah Group currently consists of 11 luxury hotels and resorts, seven ofwhich are owned and managed, and four of which are managed, by Jumeirah Group. The hotelsand/or resorts it owns besides the Burj Al Arab and Jumeirah Beach Hotel include Emirates Towers(hotel and office towers in the heart of Dubai), The Jumeirah Beach Club and the Madinat Jumeirah(a cluster of three resorts, i.e. Al Qasr, Mina Al Salam and Dar Al Masyaf, as well as shops,restaurants and entertainment mall). It has obtained contracts to manage hotels both locally andinternationally such as Bab Al Shams (a desert resort in the outskirts of Dubai), The Carlton Towerand The Lowndes Hotel in London and Essex House in New York City. Bab Al Shams, Carlton Towerand Lowndes Hotel are each owned by His Highness Sheikh Mohammed bin Rashid Al Maktoumwhile Essex House is owned by Dubai Investment Group LLC.

All of these hotels (both those owned and managed by Jumeirah Group and those which aremanaged by Jumeirah Group) have a capacity of over 3,090 rooms, as set out in detail in the tablebelow:

Property Location Owned/ Managed Rooms111 111 1111112 111

Burj al Arab Dubai Owned 202Jumeirah Beach Hotel Dubai Owned 617Emirates Towers Dubai Owned 400Madinat Jumeirah Dubai Owned 884Jumeirah Beach Club Dubai Owned 50Bab Al Shams Dubai Managed 115Essex House New York Managed 515The Carlton Tower London Managed 220The Lowndes Hotel London Managed 87

Total 3,090

Jumeirah Group has also established the Emirates Academy of Hospitality Management (the“Emirates Academy”) in October 2001. It offers degree-level courses in hospitality studies inconjunction with the Ecole Hôtelière de Lausanne in Switzerland and is the first major academywhich focuses on tourism and hospitality training in the Middle East.

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For the period from 1 February 2005 to 31 December 2005, Jumeirah Group’s total revenues wereapproximately AED 1,999 million and its EBITDA was AED 772 million.

Jumeirah Group’s strategy is to continue to promote and strengthen its business model, which hasbeen at the core of its success as a premier hospitality and leisure organisation. The key elements ofits business model are as follows:

(i) World renowned brand name

Jumeirah Group has, and expects to continue to maintain, a reputation as an operator of highquality, world-class hotels and resorts. Hotels and buildings such as the Burj Al Arab, JumeirahBeach Hotel and Emirates Towers have become icons of Dubai. As a result, the Jumeirahbrand has become associated with quality and luxury and continues to attract tourists andbusiness travellers alike. Dubai’s strong economic growth and its continued promotion as aholiday destination are expected to ensure high occupancy rates of Jumeirah Group’s hotelsand resorts.

(ii) Acquisition of management contracts

Jumeirah Group has acquired key contracts to manage hotels both locally and overseas, asdescribed above. The importance of its hotel management business has led to a decision byJumeirah Group to restructure its operations in 2007 so as to segregate its managementoperations from its property assets in accordance with the best practices of the hotel industryand so that it can focus on increasing its hotel management operations. However, both theproperty and the hospitality management arms will continue to remain under the commonownership of the Company.

In order to enhance its hotel management business, Jumeirah Group has obtained moremanagement contracts, including the contract to manage Dubai Towers in Doha, which isbeing developed by SAMA Dubai. It has also obtained direct awards to manage hotels inShanghai and Beijing as well as a 40-storey skyscraper in London to be developed by theBeetham Group. Typically, the tenor of each management contract ranges between 15 to 20years. Each of Jumeirah Group’s management contracts is expected to help to maintain andstrengthen its brand name at a domestic and international level.

(iii) Emphasis on hospitality management

Jumeirah Group aims to not only maintain its reputation as an operator of top quality hotelsand resorts but also as a provider of highly trained personnel in the field of hospitalitymanagement. To further this aim it has set up the Emirates Academy. Jumeirah Groupattracts approximately 20% of graduates from the Emirates Academy thereby ensuring thatonly the most highly trained hospitality staff work in Jumeirah Group’s hotels and resorts.Jumeirah Group believes that this forms an essential part of its reputation and attracts a loyalcustomer base.

Competition

Real estate industry

Apart from the Company, Nakheel and Emaar Properties PJSC (“Emaar”) are also significant playersin the real estate market in Dubai. Nakheel is wholly owned by the Government of Dubai. Emaar isa publicly listed company with the Government of Dubai holding approximately 32% of its shareswhile the Company’s parent company, Dubai Holding, is owned as to 99.67% by His HighnessSheikh Mohammed bin Rashid Al Maktoum.

Nakheel has a large number of commercial and residential properties under different stages ofdevelopment. Its projects are located solely in Dubai and include the Palm Islands projects, the

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World and Jumeirah Islands. Emaar is the largest real estate company in the world by marketcapitalisation. It was the first real estate company in Dubai to offer residential units, including landplots, villas and condominiums to non-GCC nationals on a freehold basis with a focus on master-planned lifestyle communities. It has developed eight integrated residential developments in Dubaicomprising over 14,000 homes.

All three companies contribute towards achieving Dubai’s economic vision as they each have specificareas of expertise and can therefore develop projects which compliment one another. For example,Nakheel has particular expertise in managing seaports and developing coastline properties and hastherefore undertaken a project to extend the coastline along the Dubai Creek by developing thePalm Islands projects. Emaar is building the Burj Dubai development, a large scale mixed use urbandevelopment along the Dubai Creek which will form the new downtown area of Dubai. TheCompany (through its subsidiary DP), is developing Business Bay, a commercial project whichcomprises offices and residential towers adjacent to the Burj Dubai development. The proximity ofeach of these developments to one another makes them more attractive to investors as well asbusinesses and home-owners.

Emaar and Nakheel also develop complimentary real estate projects overseas. For example in March2006, Emaar signed a memorandum of understanding with the Government of Morocco to buildthree master-planned lifestyle communities, including a golf and ski community, while the Company(through SAMA Dubai) is currently developing Amwaj, an urban development comprising hotels andresorts.

While the businesses and operations of the Company, Emaar and Nakheel are aligned with Dubai’seconomic vision, they also provide a significant degree of competition for one another within thereal estate market. For example, the Company faces competition from Emaar in the development ofmaster-planned lifestyle communities as Emaar was the first real estate company to develop suchcommunities (such as Arabian Ranches and Emirates Hills) in Dubai and therefore sets thebenchmark for the quality of such developments.

On a regional level, the Company may also face a degree of competition from local real estatecompanies or other real estate companies from other countries in the region.

Hospitality and leisure industry

The Company has a strong position in the hospitality and leisure industry (see “Jumeirah Group”above). However, it faces competition from several key hotel chains in Dubai such as the RitzCarlton, The One & Only and Four Seasons. The Jumeirah brand is constantly benchmarked againstthese hotel chains to ensure that it maintains a high level of quality and service. In terms of itsinternational operations, it currently manages two hotels in London and one in New York and facescompetition from leading hotel chains in those countries, including the hotel chains mentionedabove. Through the acquisition of hotel management contracts in other countries, it aims toenhance its competitive position in the international hotel business.

Strategy

The Company’s overall strategy is aligned with the Government of Dubai’s vision of becoming anattractive hub for foreign investors and businesses, an ideal lifestyle and tourist destination as wellas to encourage a “knowledge based economy” focused on sectors such as media,telecommunications and education. It focuses on developing an innovative and diverse range ofprojects in order to help achieve this vision. However, in order to ensure that it is able to executesuch projects successfully and that adequate financing is available for them, it adheres to a detailedinvestment, funding and debt strategy.

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Investment strategy

The Company’s primary investment principle is that any project it undertakes must be aimed atimproving the quality of life and business operations in the countries in which such projects areundertaken. It targets projects which will utilise the Company’s existing expertise, thereby allowingit to add value to those projects through speedy execution and intra-group cost synergies. Eachinvestment must have the potential for high overall returns and long-term capital growth. Therefore,the Company focuses on large-scale investments within Dubai and in the wider Middle East andNorth African region. Its strategy is to invest only in projects which have the potential to achieve areturn of not less than 15% over a full investment cycle.

This overall investment strategy is best illustrated through the specific investment strategies of DP,SAMA Dubai and Tatweer, the Company’s main domestic and international real estate developmentsubsidiaries. Large-scale projects such as The Lagoons, Business Bay and Dubailand are developedfollowing a systematic process. First, the detailed master plans for the overall real estate projects aredrawn-up and then the main infrastructure (such as the necessary utilities and road networks) isinstalled. The master plans usually entail developing “anchor projects” first, such as Al-Bawadiwhich will form part of Dubailand, in order to generate interest in the surrounding land. The nextstage is to sell a significant portion of the developed land surrounding the anchor project to co-developers which will in turn provide finance for that anchor project. DP, SAMA Dubai and Tatweerdo not provide equity or debt financing to their co-developers. In addition, most of the residentialand commercial developments are sold before completion, providing a main source of finance andguaranteeing future revenues (see “Pre-selling of Properties” below). After completion and transferof the projects, they will continue to produce profitable, annuity-like income streams through long-term management contracts and rental income.

Funding Strategy

The Company intends to finance its future operations through:

• land sale proceeds;

• pre-selling;

• cash generated from its internal operations;

• bank financing (for example, bridging facilities have been put in place to finance potentialinvestments);

• domestic capital markets; and

• international capital markets, including the issuance of Notes under the Programme.

(i) Financing from land sales

The Company’s land-owning subsidiaries obtain their land through government grants. Theland is granted by the Government of Dubai to the Company with an implicit condition todevelop, lease or sell the land to private developers. Granted land is valued by independentvaluers at its fair value at the date of the grant and recorded in the balance sheet at thisvalue. Received land is carried on the balance sheet as an asset with a corresponding deferredgrant as a liability until the implicit condition above is met. The deferred grant is released toincome as the land is utilised and the implicit condition of developing, selling or leasing theland is satisfied. The release of the grant is a non-cash transaction. No cash outflow will resultfrom the deferred grant as it represents deferred (unrecognised) revenue. No cash inflow willresult from the release of deferred grant as it represents release of “revenue in kind”. The on-sale of some of this land allows those subsidiaries to remain financially self-reliant despitelarge project financing needs. Contracts for the sale of land typically require that thepurchaser makes an advance payment of between 10% to 25% of the purchase price of land

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with the balance to be paid over a two year period. The principal sources of land sales are theprojects built by Tatweer (such as Dubailand), SAMA Dubai (such as The Lagoons) and DP(such as Business Bay, The Villa and Culture Village). The Company currently receives 30% ofthe proceeds from such land sales by way of dividend from its land-owning subsidiaries. Asthese real estate developments progress, the revenue from land sales as a proportion of theCompany’s total revenues will decrease. Land sales are expected to constitute only 15% oftotal revenues in 2010 as against 23% of total revenues in 2005. The Company will thereforebecome increasingly reliant upon recurring income such as leases and sales of developedproperty units.

(ii) Pre-selling of Properties

Subsidiaries such as DP and SAMA Dubai fund their on-going projects principally by pre-selling the properties in those projects, so that they do not incur a large amount of debt. Theyenter into progressive payment contracts with the future owners of the property prior toconstruction. Payments are usually made in instalments over the period of construction of theproject and purchasers pay initial deposits typically of between 10% to 25% of the purchaseprice. To date pre-selling has proved to be successful. For example, 75% of the apartments inJumeirah Beach Residences were pre-sold within 12 months of the project being launched in2002 with the next 15% to 20% of apartments being pre-sold by 2004 while 200 unitswhere held by DP for rental purposes. Purchasers of apartments provided initial depositsamounting to 25% of the purchase price. In Business Bay, 96% of land, 100% of self-developed office space and 28% of the apartments have been pre-sold to investors. Pre-selling has therefore enabled each of these projects to be self-financing.

Debt Strategy

Since the Company was only incorporated recently, its current debt profile shows bank debtincurred at subsidiary level. The total amount of outstanding bank debt of its wholly-ownedsubsidiaries as at 31 December 2006 was approximately AED 3.8 billion excluding intra-group debtof approximately AED 6.08 billion. The following table shows the proportion of debt incurred by itswholly-owned subsidiaries (TECOM, SAMA Dubai and Jumeirah Group being the only wholly-ownedsubsidiaries which have incurred debt to fund their operations):

As at31 December 20061111121

(%)SubsidiariesTECOM ...................................................................................................................... 38SAMA Dubai .............................................................................................................. 38Jumeirah Group .......................................................................................................... 24

The total debt of Maltacom (in which TECOM has a 60% shareholding) as at 31 May 2006 wasAED 130 million.

The Company intends to either refinance existing debt by borrowing at the Company level or toallow the Subsidiaries to repay their borrowings. However, it will not permit new debt to be raisedat subsidiary level except for non-recourse project finance and debt incurred in setting up jointventures.

The Company’s debt maturity management strategy includes refinancing existing debt with longermaturities as well as diversifying its range of debt instruments in the international capital marketsand in its domestic borrowings. It has also adopted a pro-active approach to managing its cost ofcapital. Management monitors interest rate movements and manages its interest rate risk throughthe use of derivative financial instruments.

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Outlook

The Company has a diverse portfolio of operations which has evolved over the past year. Itscombined financial statements for the year ended 31 December 2005 show that 43.7% of itsrevenues were derived from the hospitality and leisure sector, followed by 16.6% from land salesand 23.8% from the real estate sector. For the year ended 31 December 2006, the Companyexpects a change in the proportion each of these sectors contribute to the Company’s overallrevenues with the real estate sector providing the largest portion. This is because of the largenumber of real estate projects currently under development in respect of which revenues will berecognised in 2006. Although the revenues of Jumeirah Group will continue to grow, they willconstitute a smaller proportion of the Company’s overall revenues as compared to revenues fromthe real estate sector.

Litigation

The Company has not been involved in any legal or arbitration proceedings (including any suchproceeding which is pending or threatened of which it is aware) which may have or have had in theprevious twelve months a material adverse effect on its financial condition.

Management

Executive Committee

The Executive Committee is headed by the Executive Chairman, H.E. Mohammad Al Gergawi. Themain objectives of the Executive Committee are to:

• crystallise the Company’s strategic objectives (see “-Strategy” above);

• mobilise the necessary resources to achieve those objectives;

• establish appropriate controls to manage the actual performance and appraisal of thoseresources vis-à-vis those objectives; and

• align the objectives of each subsidiary with those of the Company as a whole.

Mohammad Al GergawiExecutive Chairman

Group Security Audit Committee

Group Functions

Entities

Sama DubaiFarhan Faraidooni

Sub Entities Sub Entities Sub Entities

Group Security

Entities

Sub Entities Sub Entities Sub Entities

Audit Committee

Finance/Legal/OperationsFadel Al Ali

Chief Financial &Operating Officer

Group ITSabri Al Azzazi

Chief InformationOfficer

Internal Audit &Risk Management

Abdulrahman HarebChief Internal Audit Officer

Group MarketingMalek Inja

Chief Maketing Officer

TECOM InvestmentsAhmad Bin Byat

Executive Chairman

Jumeirah GroupGerald Lawless

Chief Executive Officer

Dubai PropertiesHashim Al Dabal


Sama DubaiFarhan Faraidooni


TatweerSaeed Al Muntafiq


Sub EntitiesSub Entities

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The following table shows the members of the Executive Committee of the Company as at the dateof this Prospectus:

Name Position112 111

H.E. Mohammad Al Gergawi Executive ChairmanFadel Al Ali Chief Financial and Operating OfficerHashim Al Dabal Chief Executive Officer, Dubai PropertiesFarhan Faraidooni Chief Executive Officer, SAMA DubaiSaeed Al Muntafiq Chief Executive Officer, TatweerAhmad Bin Byat Chief Executive Officer, TECOMGerald Lawless Chief Executive Officer, Jumeirah GroupSaud BaAlawy Chief Executive Officer, Dubai Investment GroupSameer Al Ansari Chief Executive Officer, Dubai International Capital

The business address for each member of the Executive Committee is c/o Dubai HoldingCommercial Operations Group LLC at P. O. Box 66000, Dubai, UAE.

As at the date of this Prospectus, there are no actual or potential conflicts of interest between anyduties of the members of the Executive Committee and their duties in respect of their otherdirectorships or their private interests.

Profiles of key members of the Executive Committee are given below:

His Excellency Mohammad Al Gergawi

H.E. Mohammad Al Gergawi is the UAE Minister of State for Cabinet Affairs. He is also theChairman of the Arab Strategy Forum and the Managing Director of Dubai Media Incorporated. Hehas also actively participated in leading and supervising the implementation of several Emirate-wideinitiatives. He is also the Chairman of the private office of His Highness Sheikh Mohammed BinRashid Al Maktoum (“The Executive Office”) and was the first founding Chairman of the YoungArab Leaders organisation.

H.E. Mohammad Al Gergawi has received numerous awards such as the Moroccan Royal Order ofMerit by His Majesty King Mohammad VI of Morocco and the American Business Award by theAmerican Business Council.

Fadel Al Ali

Fadel Al Ali is Chief Financial and Operating Officer of the Company. He was formerly Head of UAEDistribution for Citibank, N.A., Dubai. He worked at Citigroup for over 16 years, covering consumercredit management, financial control, sales, distribution and strategic planning. Mr Al Ali has a BScHonours degree in Industrial and Systems Engineering from the University of Southern California,Los Angeles. He also holds a certificate of finance from the American University of Sharjah, UAE. MrAl Ali also sits on the boards of National Bonds Corporation, Dubai Bank, Islam Bank and the DubaiMercantile Exchange.

Hashim Al Dabal

Hashim Al Dabal is Chief Executive Officer of Dubai Properties. He is also Senior Vice-President forAsset Management for the Dubai Investment Group and Vice Chairman of the DTMFZ. Mr Al Dabalwas formerly an Executive Director at the Dubai Islamic Bank and prior to that he worked for tenyears at Citibank U.A.E., where he was Resident Vice President.

Farhan Faraidooni

Farhan Faraidooni is the Chief Executive Officer of SAMA Dubai. He was the former Chief ExecutiveOfficer of the Executive Design Bureau, an entity of The Executive Office, where projects such as

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Jumeirah Beach Residences, Dubai Healthcare City and the Dubai International Financial Centrewere conceptualised. Mr Faraidooni has also served as Head of Zoning at the Town PlanningDepartment at Dubai Municipality, and as the Head of Real Estate at the Dubai TechnologyElectronic Commerce & Media Free Zone Authority. In addition to his role as Chief Executive Officerof SAMA Dubai, Mr Faraidooni is also a Board Member of Dubai Healthcare City.

Mr Faraidooni holds a Bachelor of Engineering and Architecture degree from the UAE University inAl Ain.

Saeed Al Muntafiq

Saeed Al Muntafiq is the Chief Executive Officer of Tatweer. Mr Al Muntafiq was the DirectorGeneral of the Dubai Development and Investment Authority, a government organisationresponsible for Dubai’s economic development and formerly the Chairman of the Board of DubaiMedia City and a founding member of the DTMFZ. Mr Al Muntafiq is the Chairman of the SheikhMohammed bin Rashid Establishment for Young Business Leaders. He graduated from SchillerInternational University in the United Kingdom with a Bachelor of Arts in International Relations andcompleted the Management Development Program at Harvard Business School.

Ahmad Bin Byat

Ahmad Bin Byat has been the Director General of TECOM since 2002 and is a member of theboards of the DTMFZ, Dubai Media Incorporated, Empower and the Executive Chairman of EmiratesIntegrated Telecommunication Corporation. Mr Bin Byat is also a member of a Supreme TelecomCommittee created by the Late President of the UAE, His Highness Sheikh Zayed Bin Sultan AlNahyan, to oversee the gradual introduction of competition into the UAE’s telecom sector. Prior tothis, he worked in a senior managerial capacity in Etisalat, the UAE state telecom service provider.

Gerald Lawless

Gerald Lawless is Chief Executive Officer of Jumeirah Group. Mr Lawless joined Jumeirah Group asManaging Director in June 1997 to oversee the opening of the Jumeirah Beach Hotel, Wild WadiWater Park and Burj Al Arab. Prior to joining Jumeirah Group, Mr Lawless spent 23 years workingfor Forte Hotels and established the Middle East office of Forte Hotels in Dubai in 1991.

Saud BaAlawy

Saud BaAlawy is the Chief Executive Officer of Dubai Investment Group LLC and was the ChiefInvestment Officer of Dubai Internet City. Prior to joining Dubai Investment Group, he was the GulfTreasurer and Vice President of Citibank, N.A. in Dubai. Mr BaAlawy also sits on the board of DubaiIslamic Insurance and Reinsurance Company and E-Millennium Private Equity Fund. He is also amember of the Chartered Institute of Management Accountants.

Sameer Al Ansari

Sameer Al Ansari is the Chief Executive Officer of Dubai International Capital and sits on the boardof several local and international companies such as Dubai Media Incorporated, the DubaiInternational Financial Exchange, Jumeirah Group and The Tussauds Group. He was previously theChief Financial Officer of the Dubai Aluminium Company. In 2003, Mr Al Ansari was appointed asGroup Chief Financial Officer of The Executive Office. He is a fellow of the Institute of CharteredAccountants in England and Wales.

Corporate Governance

The Investment Committee

The Investment Committee is responsible for approving the Company’s investments and ensuringthat an appropriate balance is achieved between risks and rewards. The members of the InvestmentCommittee comprise the members of the Executive Committee as well as the Chief Financial Officer

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and the Treasurer. The Investment Committee ensures that adequate internal control processes arein place for making investment decisions and determines whether such investments yield adequatereturns in line with the Company’s investment objectives. The Investment Committee alsorecommends appropriate process improvements. Although the members of the InvestmentCommittee include the members of the Executive Committee, the two committees meet in separatecapacities.

The Audit Committee

The Audit Committee comprises independent non-executive members who audit the Company’sfinancial procedures and initial control and review the Company’s compliance with IFRS. It alsoprovides the Executive Chairman and the Executive Committee with advisory services on risks,internal audit controls and corporate governance.

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Overview of the United Arab Emirates and Dubai

The United Arab Emirates is a federation of seven emirates. Formerly known as the Trucial States,they were a British protectorate until gaining independence in December 1971 when they mergedto form the United Arab Emirates. In common with other Arab states in the Gulf, all of the emirateshave traditional monarchical governments which rule by emiri decree and no democraticrepresentation. Each emir reserves a high degree of political autonomy within the federation,though in practice, real power is vested in the two richest emirates Abu Dhabi and Dubai. The otherfive emirates are Sharjah, Ajman, Umm Al-Qaiwain, Fujairah and Ras Al-Khaimah.

The federation is governed by the Supreme Council of the Rulers. This is the highest federalgoverning body and consists of the rulers of the seven emirates. The Supreme Council elects fromits own membership the President and the Vice President (for renewable five-year terms). H.H.Sheikh Zayed bin Sultan Al Nahyan, the late Ruler of Abu Dhabi, held the position of President from1971 until his death in November 2004. Following his death, his son H.H. Sheik Khalifa bin Zayed AlNahyan took over as President of the United Arab Emirates.

H.H. Sheikh Mohammed bin Rashid Al Maktoum, is also the Vice President of the UAE. The positionof Ruler of Dubai is passed down by the laws of succession. All the powers of government in Dubaiare vested in the Ruler. The various departments and other arms of the Government and theirrespective executives operate under the powers and responsibilities specifically delegated to themfrom time to time by the Ruler. Laws of Dubai are passed by Decree of the Ruler.

The UAE (2005 GDP: U.S.$127.6 billion)1 is the second largest economy in the Arab world afterSaudi Arabia (2005 GDP: U.S.$307,770 billion)2. Though it has a more diversified economy thanmost of its the other countries in the Gulf Cooperation Council (“GCC”), its wealth is largely basedon oil and gas, which provides around a third of the gross domestic product (“GDP”) and half ofexports. It has approximately 8% of proven global oil reserves according to the most recentestimates of the U.S. Energy Information Administration.

As approximately 70% of the UAE’s fiscal revenues come from oil, its finances are vulnerable to thevagaries of oil prices. Deficits have been a constant feature of public finance since 1986 but havebeen financed by investment income rather than borrowings. The use of oil revenues to build up alarge stock of overseas assets has been a long running fiscal policy and has given the UAE a healthynet asset position of around 15% of GDP. Official reserves are broadly equivalent to total short-termexternal debt, and banks also have substantial liquid foreign assets, which together provides thecountry with comfortable external solvency and liquidity ratios. The UAE’s economy has performedsoundly over the past few years. Its real GDP growth reached 9.7% in 2004 and an estimated 8.8%in 2005. Its GDP is forecasted to grow by 10% by the end of 2006.3

Abu Dhabi is the richest and largest of the seven emirates and the city of Abu Dhabi is also thechosen capital of the federation. The emirate of Abu Dhabi owns and controls around 90% of thecapital wealth of the United Arab Emirates.

Dubai is the second largest emirate of the United Arab Emirates and has a long history as a tradingport. With only a fraction of the fossil fuel reserves of Abu Dhabi, it has gradually reduced itsdependency on oil and gas revenues. Consequently its economy has become more diversified anddynamic than Abu Dhabi’s and it is one of the most important commercial centres in the MiddleEast, with growing banking, tourism and real estate sectors. The Government of Dubai, under itspresent Ruler, HH Sheikh Mohammed Bin Rashid Al Maktoum has invested heavily in theinfrastructure of the emirate and its economic development. Dubai’s non-oil sectors now contributeto 96% of its GDP, with 70% being contributed by the service sectors.

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1 GDP figure for the UAE was sourced from the Economist Intelligence Unit, UAE Country Report, August 2006.

2 GDP figure for Saudi Arabia was sourced from an International Monetary Fund Report (2005).

3 Figures are extracted from the Economist Intelligence Unit, UAE Country Report, August 2006.

Dubai Economy

Dubai has changed dramatically over the last three decades to become a major business centrewithin a dynamic and diversified economy. It benefits from a favourable demographic profile, strongeconomic growth resulting from high oil prices, high liquidity, moderate inflation, large investmentsin infrastructure in the non-oil sector as well as high sovereign ratings. It also serves as the biggestre-exporting centre in the Middle East.

Its low logistical and operational costs, advanced infrastructure, international outlook and liberalgovernment policies have attracted investors. Sectors such as trade, transport, tourism, industry andfinance have grown steadily and helped the economy to achieve a high degree of expansion anddiversification.

With a strategic location and a consistently strong economic outlook, Dubai is seen as an ideal basefor multinationals targeting markets in Central Asia, the Middle East, Africa, the Asian sub-continentand the Eastern Mediterranean. Together, these regions have a population of over two billionpeople and a combined GDP of U.S.$6.7 trillion.

Dubai is also a pre-eminent tourist destination and attracts a large number of skilled, diverse andmultilingual professionals. Its economic cluster of technology, media, finance and healthcare hubsmakes Dubai a magnet for the regional headquarters of the world’s major multinational companies.

In addition to its economic advantages, the city offers a high quality lifestyle with luxury residentialand office accommodation and excellent educational, health and shopping facilities.

Dubai Real Estate Sector

The real estate sector in Dubai offers potential for investment returns for a variety of reasonsincluding the emergence of Dubai as a hub for the tourism industry and its evolution as a ”lifestyledestination”. The property industry includes enterprises that are primarily engaged in renting orleasing real estate to other parties, managing real estate, selling and buying and providing other realestate related services, such as consultancy services.

Until recently, under the laws of Dubai, persons who were not nationals of GCC countries could nothold title to real estate located in Dubai. In the first half of 2006, the law was changed to allownon-GCC nationals to hold title to certain properties in Dubai. This has resulted in an increase in thenumber of real estate projects in Dubai. In addition, Dubai has benefited from the highest premiumfor commercial office space in the region because of its favourable legal framework and the lack ofcomparable office space in other GCC countries. The International Monetary Fund conservativelyestimates that U.S.$200 billion of real estate projects are either in the process of development or areplanned on being developed in Dubai.1

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1 Figures are extracted from the Economist Intelligence Unit, UAE Country Report, August 2006.

Taxation

The following is a general description of certain tax considerations relating to the Notes. It does notpurport to be a complete analysis of all tax considerations relating to the Notes. Prospectivepurchasers of Notes should consult their own tax advisers as to which countries’ tax laws could berelevant to acquiring, holding and disposing of Notes and receiving payments of interest, principaland/or other amounts under the Notes and the consequences of such actions under the tax laws ofthose countries. This summary is based upon the law as in effect on the date of this Prospectus andis subject to any change in law that may take effect after such date.

Dubai Tax Law

There is currently in force in the Emirates of Abu Dhabi and Dubai, legislation establishing a generalcorporate taxation regime (the Abu Dhabi Income Tax Decree 1965 (as amended) and the DubaiIncome Tax Decree 1969 (as amended)). The regime is, however, not enforced save in respect ofcompanies active in the hydrocarbon industry, some related service industries and branches offoreign banks operating in the United Arab Emirates. It is not known whether the legislation will orwill not be enforced more generally or within other industry sectors in the future.

Under current legislation, there is no requirement for withholding or deduction for or on account ofUnited Arab Emirates or Dubai taxation in respect of payments of interest or principal on debtsecurities (including the Notes).

The Constitution of the United Arab Emirates specifically reserves to the Federal Government of theUnited Arab Emirates the right to raise taxes on a Federal basis for the purpose of funding itsbudget. It is not known whether this right will be exercised in the future.

The United Arab Emirates has entered into “Double Taxation Arrangements” with certain othercountries, but these are not extensive in number.

Cayman Islands Tax Law

Prospective investors should consult their professional advisers on the possible tax consequences ofbuying, holding or selling any Notes under the laws of their country of citizenship, residence ordomicile. The following is a discussion on certain Cayman Islands income tax consequences of aninvestment in the Notes. The discussion is a general summary of present law, which is subject toprospective and retroactive change. It is not intended as tax advice, does not consider any investor’sparticular circumstances, and does not consider tax consequences other than those arising underCayman Islands law.

Under existing Cayman Islands laws:

• payments of interest and principal on the Notes will not be subject to taxation in the CaymanIslands and no withholding will be required on the payment of interest and principal to anyholder of the Notes nor will gains derived from the disposal of the Notes be subject toCayman Islands income or corporation tax. The Cayman Islands currently have no income,corporation or capital gains tax and no estate duty, inheritance tax or gift tax; and

• no stamp duty is payable in respect of the issue of the Notes. An instrument of transfer inrespect of a Note is stampable if executed in or brought into the Cayman Islands.

EU Directive on the Taxation of Savings Income

The European Union (the “EU”) has adopted a directive regarding the taxation of savings income(the “Directive”). The Directive requires Member States to provide to the tax authorities of otherMember States details of payments of interest and other similar income paid by a person to anindividual in another Member State, except that Austria, Belgium and Luxembourg will instead

67


impose a withholding system for a transitional period unless during such period they electotherwise. A number of third countries and territories including the Cayman Islands have adoptedsimilar measures to the EU Directive.

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Subscription and Sale

Notes may be sold from time to time by the Issuer to any one or more of J.P. Morgan SecuritiesLtd., ABN AMRO Bank N.V., Barclays Bank PLC, BNP PARIBAS, Citigroup Global Markets Limited,Dresdner Bank Aktiengesellschaft, Emirates Bank International PJSC, HSBC Bank Middle EastLimited, Mashreqbank psc, Standard Chartered Bank and The Royal Bank of Scotland plc, (together,the “Dealers”). Notes may also be sold directly to institutions who are not Dealers. Thearrangements under which Notes may from time to time be agreed to be sold by the Issuer to, andpurchased by, Dealers are set out in a Programme Agreement dated 23 January 2007 (the“Programme Agreement”) and made between the Issuer, the Guarantor and the Dealers. TheProgramme Agreement makes provision for the resignation or termination of appointment ofexisting Dealers and for the appointment of additional or other Dealers either generally in respect ofthe Programme or in relation to a particular Tranche of Notes.

United States of America:

The Notes have not been and will not be registered under the Securities Act, and may not beoffered, sold or delivered within the United States or to, or for the account or benefit of, U.S.persons except in certain transactions exempt from the registration requirements of the SecuritiesAct. Terms used in this paragraph have the meaning giving to them by Regulation S under theSecurities Act.

Notes having a maturity of more than one year are subject to U.S. tax law requirements and maynot be offered, sold or delivered within the United States or its possessions or to a United Statesperson, except in certain transactions permitted by U.S. tax regulations. Terms used in thisparagraph have the meanings given to them by the U.S. Internal Revenue Code of 1986, asamended, and regulations thereunder.

Each Dealer has agreed that, and each further Dealer appointed under the Programme will berequired to agree that, except as permitted by the Programme Agreement, it will not offer, sell ordeliver the Notes of any identifiable Tranche, (i) as part of their distribution at any time or (ii)otherwise until 40 days after completion of the distribution of such Tranche as determined, andcertified to the relevant Dealer, by the Issuing and Paying Agent, or in the case of Notes issued on asyndicated basis, the Lead Manager, within the United States or to, or for the account or benefit of,U.S. persons, and it will have sent to each Dealer to which it sells Notes during the distributioncompliance period a confirmation or other notice setting forth the restrictions on offers and sales ofthe Notes within the United States or to, or for the account or benefit of, U.S. persons. Unlessotherwise defined herein, terms used in this paragraph have the meanings given to them inRegulation S under the Securities Act.

In addition, until 40 days after the commencement of the offering, an offer or sale of Notes withinthe United States by any dealer that is not participating in the offering may violate the registrationrequirements of the Securities Act.

United Kingdom

Each Dealer has represented and agreed that:

(a) No deposit-taking: in relation to any Notes having a maturity of less than one year:

(i) it is a person whose ordinary activities involve it in acquiring, holding, managing ordisposing of investments (as principal or agent) for the purposes of its business; and

(ii) it has not offered or sold and will not offer or sell any Notes other than to personswhose ordinary activities involve them in acquiring, holding, managing or disposing ofinvestments (as principal or agent) for the purposes of their businesses or who it isreasonable to expect will acquire, hold, manage or dispose of investments (as principal

69


or agent) for the purposes of their businesses where the issue of the Notes wouldotherwise constitute a contravention of Section 19 of the FSMA by the Issuer;

(b) Financial promotion: it has only communicated or caused to be communicated and will onlycommunicate or cause to be communicated any invitation or inducement to engage ininvestment activity (within the meaning of section 21 of the FSMA) received by it inconnection with the issue or sale of any Notes in circumstances in which section 21(1) of theFSMA does not apply to the Issuer or the Guarantor; and

(c) General compliance: it has complied and will comply with all applicable provisions of theFSMA with respect to anything done by it in relation to any Notes in, from or otherwiseinvolving the United Kingdom.

United Arab Emirates

Each Dealer has represented and agreed that the Notes have not and will not be offered, sold orpublicly promoted or advertised by it in the United Arab Emirates or the Dubai InternationalFinancial Centre other than in compliance with any laws applicable in the United Arab Emirates orthe Dubai International Financial Centre, as the case may be, governing the issue, offering and saleof securities.

Italy

Each Dealer has acknowledged that the offer of the Notes has not been registered with theCommissione Nazionale per le Società e la Borsa (“CONSOB”) (the Italian Securities and ExchangeCommission) pursuant to Italian securities legislation and accordingly, Notes may not be offered,sold or delivered, nor may copies of this Prospectus or of any other document relating to the Notesbe distributed in the Republic of Italy in a solicitation to the public at large (sollecitazioneall’investimento) within the meaning of Article 1, paragraph 1, letter (t) of Legislative Decree no. 58of 24 February 1998, unless an exemption applies. Accordingly, in the Republic of Italy, the Notes:

(a) shall only be offered or sold to professional investors (operatori qualificati), as defined inArticle 31, second paragraph of CONSOB Regulation No. 11522 of 1 July 1998, as amendedand effected in compliance with the terms and procedures provided therein (“RegulationNo. 11522”) or;

(b) shall only be offered or sold in circumstances which are exempted from the rules onsolicitation of investments pursuant to Article 100 of Legislative Decree No. 58 of 24 February1998 (the “Financial Services Act”) and Article 33, first paragraph, of CONSOB RegulationNo. 11971 of 14 May 1999 as amended.

Moreover, and subject to the foregoing, each Dealer has acknowledged that any offer, sale ordelivery of any Notes or distribution of copies of this Prospectus or any other document relating toany Notes in the Republic of Italy under (a) or (b) above must be:

(1) made by an investment firm, bank or financial intermediary permitted to conduct suchactivities in the Republic of Italy in accordance with the Financial Services Act, LegislativeDecree No. 385 of 1 September 1993 (the “Banking Act”), Regulation No. 11522 and anyother applicable laws and regulations; and

(2) in compliance with any other applicable laws and regulations including any relevantlimitations which may be imposed by CONSOB or the Bank of Italy.

Insofar as the requirements above are based on laws which are superseded at any time pursuant tothe implementation of Directive 2003/71/EC (the “Prospectus Directive”), such requirements shallbe replaced by the applicable requirements under the Prospectus Directive or the relevantimplementing laws.

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Cayman Islands

No invitation whether directly or indirectly may be made to the public in the Cayman Islands tosubscribe for the Notes unless the Issuer is listed on the Cayman Islands Stock Exchange.

The Netherlands

Each Dealer has represented and agreed that zero coupon Notes in definitive form and other Notesin definitive form on which interest does not become due and payable during their term but only atmaturity (savings certificates or spaarbewijzen as defined in the Dutch Savings Certificates Act orWet inzake spaarbewijzen, the “SCA”) may only be transferred and accepted, directly or indirectly,within, from or into The Netherlands through the mediation of either the Issuer or a member ofEuronext Amsterdam N.V. with due observance of the provisions of the SCA and its implementingregulations (which include registration requirements). No such mediation is required, however, inrespect of (i) the initial issue of such securities to the first holders thereof, (ii) the transfer andacceptance by individuals who do not act in the conduct of a profession or business, and (iii) theissue and trading of such securities if they are physically issued outside The Netherlands and are notimmediately thereafter distributed in The Netherlands.

General

Each Dealer has severally acknowledged to the Issuer and the Guarantor that no representation ismade by the Issuer, the Guarantor or any Dealer that any action has been or will be taken in anyjurisdiction by the Issuer, the Guarantor or any Dealer that would permit a public offering of theNotes, or possession or distribution of this Prospectus or any other offering material, in any countryor jurisdiction where action for that purpose is required. Each Dealer will (to the best of itsknowledge and belief in all material respects) comply with all applicable securities laws andregulations in each jurisdiction in which it purchases, offers, sells or delivers Notes or has in itspossession or distributes this Prospectus or any other offering material, in all cases at its ownexpense.

Selling restrictions may be supplemented or modified with the agreement of the Issuer, theGuarantor and the Dealers. Any such supplement or modification may be set out in the relevantFinal Terms (in the case of a supplement or modification relevant only to a particular Tranche ofNotes) or in a supplement to this Prospectus.

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Form of Final Terms

Final Terms dated [•]

DUBAI HOLDING COMMERCIAL OPERATIONS MTN LIMITED

Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes]

unconditionally and irrevocably guaranteed as to payment of principal and interest by

DUBAI HOLDING COMMERCIAL OPERATIONS GROUP LLC

under the U.S.$5,000,000,000

Debt Issuance Programme

PART A – CONTRACTUAL TERMS

Terms used herein shall be deemed to be defined as such for the purposes of the Conditionsset forth in the Prospectus dated 23 January 2007 [and the supplemental prospectus dated [•]].This document constitutes the Final Terms of the Notes described herein and must be read inconjunction with such Prospectus [as so supplemented]. Full information on the Issuer and theoffer of the Notes is only available on the basis of the combination of these Final Terms and theProspectus. [The Prospectus [and the supplemental Prospectus] [is] [are] available for viewing at[address] [and] [website] and copies may be obtained from [address].]

The following alternative language applies if the first tranche of an issue which is beingincreased was issued under a Prospectus with an earlier date.

[Terms used herein shall be deemed to be defined as such for the purposes of the Conditions(the Conditions) set forth in the Prospectus dated [original date] [and the supplementalProspectus dated [•]]. [This document constitutes the Final Terms of the Notes described hereinand must be read in conjunction with the Prospectus dated [current date] [and thesupplemental Prospectus dated [•]], save in respect of the Conditions which are extracted fromthe Prospectus dated [original date] [and the supplemental Prospectus dated [•]] and areattached hereto. Full information on the Issuer and the offer of the Notes is only available onthe basis of the combination of these Final Terms and the Prospectuses dated [original date]and [current date] [and the supplemental Prospectuses dated [•] and [•]]. [The Prospectuses[and the supplemental Prospectuses] are available for viewing at [address] [and] [website] andcopies may be obtained from [address].]

[Include whichever of the following apply or specify as “Not Applicable” (N/A). Note that thenumbering should remain as set out below, even if “Not Applicable” is indicated for individualparagraphs or sub-paragraphs. Italics denote guidance for completing the Final Terms.]

1. (i) Issuer: Dubai Holding Commercial Operations MTN Limited

(ii) Guarantor: Dubai Holding Commercial Operations Group LLC

2. [(i)] Series Number: [•]

[(ii) Tranche Number: [•]

3. Specified Currency or Currencies: [•]

(If fungible with an existingSeries, details of that Series,including the date on which theNotes become fungible).]

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4. [•]

[(i)] Series: [•]

[(ii) Tranche: [•]]

5. Issue Price: [•] % of the Aggregate Nominal Amount [plusaccrued interest from [insert date] ( if applicable)]

6. [(i)] Specified Denominations: [Note - where multiple denominations above ¤50,000(or equivalent) are being used the following samplewording should be followed:

[¤50,000] and integral multiples of [¤1,000] in excessthereof [up to and including [¤99,000]. No notes indefinitive form will be issued with a denominationabove [¤99,000]].]

[(ii)] Calculation Amount: [If only one Specified Denomination, insert theSpecified Denomination. If more than one SpecifiedDenomination, insert the highest common factor][Note: There must be a common factor in the case oftwo or more Specified Denominations]

7. [(i)] Issue Date: [•]

[(ii)] Interest Commencement Date [•]

8. Maturity Date: [specify date or (for Floating Rate Notes) InterestPayment Date falling in or nearest to the relevantmonth and year]

9. Interest Basis: [•% Fixed Rate]

[[specify reference rate] +/– • % Floating Rate][Zero Coupon][Index Linked Interest][Other (specify)](further particulars specified below)

10. Redemption/Payment Basis: [Redemption at par][Index Linked Redemption][Dual Currency][Partly Paid][Instalment][Other (specify)]

11. [Specify details of any provision for convertibility ofNotes into another interest or redemption/ paymentbasis]

12. Put/Call Options: [Put Option][Call Option][(further particulars specified below)]

13. [(i)] Status of the Notes: [Senior/Subordinated]

[(ii)] Status of the Guarantee: [Senior/Subordinated]]

Change of Interest orRedemption/Payment Basis:

Aggregate Nominal Amount ofNotes admitted to trading:

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[(iii)] [•] [and [•], respectively]](N.B Only relevant where Board (or similar)authorisation is required for the particular tranche ofNotes or related Guarantee)]

14. Method of distribution: [Syndicated/Non-syndicated]

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

15. Fixed Rate Note Provisions [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)

(i) Rate[(s)] of Interest: [•] % per annum [payable [annually/semi-annually/quarterly/monthly] in arrear]

(ii) Interest Payment Date(s): [•] in each year

(iii) Fixed Coupon Amount[(s)]: [•] per Calculation Amount

(iv) Broken Amount(s): [•] per Calculation Amount, payable on the InterestPayment Date falling [in/on] [•]

(v) Day Count Fraction: [30/360 / Actual/Actual (ICMA/ISDA) / other]

(vi) Determination Dates: [•] in each year (insert regular interest payment dates,ignoring issue date or maturity date in the case of along or short first or last coupon. N.B. only relevantwhere Day Count Fraction is Actual/Actual ([ICMA]))

(vii) [Not Applicable/give details]

16. Floating Rate Note Provisions [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)

(i) Interest Period(s) [•]

(ii) [•]

(iii) Interest Period Date: [•]

(iv) Business Day Convention: [Floating Rate Convention/ Following Business DayConvention/ Modified Following Business DayConvention/ Preceding Business Day Convention/other (give details)]

(v) Business Centre(s): [•]

(vi) [Screen RateDetermination/ISDADetermination/other (give details)]

Manner in which the Rate(s)of Interest is/are to bedetermined:

Specified Interest PaymentDates:

Other terms relating to themethod of calculatinginterest for Fixed RateNotes:

[Date [Board] approval forissuance of Notes [andGuarantee] obtained:

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(vii) [•]

(viii) Screen Rate Determination:

– Reference Rate: [•]

– [•]

– Relevant Screen Page: [•]

(ix) ISDA Determination:

– Floating Rate Option: [•]

– Designated Maturity: [•]

– Reset Date: [•]

(x) Margin(s): [+/-][•] % per annum

(xi) Minimum Rate of Interest: [•] % per annum

(xii) Maximum Rate of Interest: [•] % per annum

(xiii) Day Count Fraction: [•]

(xiv) [•]

17. Zero Coupon Note Provisions [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)

(i) Amortisation Yield: [•] % per annum

(ii) [•]

18. [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)

(i) [give or annex details]Index/Formula/othervariable:

Index-Linked InterestNote/other variable-linkedinterest Note Provisions

Any other formula/basis ofdetermining amountpayable:

Fall back provisions,rounding provisions,denominator and any otherterms relating to themethod of calculatinginterest on Floating RateNotes, if different fromthose set out in theConditions:

InterestDeterminationDate(s):

Party responsible forcalculating the Rate(s) ofInterest and InterestAmount(s) (if not the[Agent]):

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(ii) [•]

(iii) [•]

(iv) [•]

(v) [•]

(vi) [•]

(vii) [•]

(viii) Business Day Convention: [Floating Rate Convention/ Following Business DayConvention/Modified Following Business DayConvention Preceding Business Day Convention/other(give details)]

(ix) Business Centre(s): [•]

(x) [•] % per annum

(xi) [•] % per annum

(xii) Day Count Fraction: [•]

19. Dual Currency Note Provisions [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)

(i) [give details]

(ii) [•]

(iii) Provisions applicable wherecalculation by reference toRate of Exchangeimpossible or impracticable:

Calculation Agent, if any,responsible for calculatingthe principal and/orinterest due:

Rate of Exchange/methodof calculating Rate ofExchange:

Maximum Rate/Amount ofInterest:

Minimum Rate/Amount ofInterest:

Specified Interest PaymentDates:

Interest or calculationperiod(s):

Provisions for determiningCoupon where calculationby reference to Indexand/or Formula and/orother variable is impossibleor impracticable orotherwise disrupted:

Interest DeterminationDate(s):

Provisions for determiningCoupon where calculatedby reference to Indexand/or Formula and/orother variable:

Calculation Agentresponsible for calculatingthe interest due:

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(iv) [•]

PROVISIONS RELATING TO REDEMPTION

20. Call Option [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)

(i) Optional Redemption Date(s): [•]

(ii) Optional Redemption

[•] per Note of [•] specified denomination

(iii) If redeemable in part:

(a) [•]

(b) [•]

(iv) Notice period [•]

21. Put Option [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)

(i) Optional Redemption Date(s): [•]

(ii) [•] per Note of [•] specified denomination

(iii) Notice period [•]

22.

(i) Index/Formula/variable: [give or annex details]

(ii) [•]Calculation Agentresponsible for calculatingthe Final RedemptionAmount:

In cases where the FinalRedemption Amount is Index-Linked or other variable-linked:

Final Redemption Amount ofeach Note

Optional RedemptionAmount(s) of each Noteand method, if any, ofcalculation of suchamount(s):

Maximum RedemptionAmount:

Minimum RedemptionAmount:

Amount(s) of each Noteand method, if any, ofcalculation of suchamount(s):

Person at whose optionSpecified Currency(ies)is/are payable:

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(iii) [•]

(iv) Determination Date(s): [•]

(v) [•]

(vi) Payment Date: [•]

(vii) Final Redemption Amount: [•]

(viii) [•]

23. Early Redemption Amount

[•]

GENERAL PROVISIONS APPLICABLE TO THE NOTES

24. Form of Notes: [Temporary Global Note exchangeable for aPermanent Global Note which is exchangeable forDefinitive Notes in the limited circumstances specifiedin the Permanent Global Note]

[Temporary Global Note exchangeable for DefinitiveNotes on [•] days’ notice]

[Permanent Global Note exchangeable for DefinitiveNotes in the limited circumstances specified in thePermanent Global Note]

25. [Not Applicable/give details. Note that this itemrelates to the date and place of payment and notinterest period end dates, to which items 15 (ii),16(iv) and 18(ix) relate]

Financial Centre(s) or otherspecial provisions relating toPayment Dates:

Early Redemption Amount(s) ofeach Note payable on redemptionfor taxation reasons or on eventof default or other earlyredemption and/or the method ofcalculating the same (if requiredor if different from that set out inthe Conditions):

Maximum Final RedemptionAmount:

Provisions for determiningFinal Redemption Amountwhere calculation byreference to Index and/orFormula and/or othervariable is impossible orimpracticable or otherwisedisrupted:

Provisions for determiningFinal Redemption Amountwhere calculated byreference to Index and/orFormula and/or othervariable:

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26. [Yes/No. If yes, give details]

27. [Not Applicable/give details]

28. [Not Applicable/give details]

29. [Not Applicable/The provisions [in Condition [•]]apply]

30. Consolidation provisions: [Not Applicable/The provisions [in Condition [•]]apply]

31. Other final terms: [Not Applicable/give details]

(When adding any other final terms considerationshould be given as to whether such terms constitutea “significant new factor” and consequently triggerthe need for a supplement to the Prospectus underArticle 16 of the Prospectus Directive.)

DISTRIBUTION

32. (i) [Not Applicable/give names]

33. [(ii) [Not Applicable/give name]

34. If non-syndicated, name of Dealer: [Not Applicable/give name]

35. Additional selling restrictions: [Not Applicable/give details]

[LISTING AND ADMISSION TO TRADING APPLICATION

These Final Terms comprise the final terms required to list and have admitted to trading theissue of Notes described herein pursuant to the U.S.$5,000,000,000 Debt Issuance Programmeof Dubai Holding Commercial Operations MTN Limited.

RESPONSIBILITY

The Issuer and the Guarantor accept responsibility for the information contained in these FinalTerms.

Stabilising Manager(s) (ifany):]

If syndicated, names ofDealers:

Redenomination,renominalisation andreconventioning provisions:

Details relating to InstalmentNotes: amount of eachinstalment, date on which eachpayment is to be made:

Details relating to Partly PaidNotes: amount of each paymentcomprising the Issue Price anddate on which each payment isto be made and consequences (ifany) of failure to pay, includingany right of the Issuer to forfeitthe Notes and interest due onlate payment:

Talons for future Coupons orReceipts to be attached toDefinitive Notes (and dates onwhich such Talons mature):

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Signed on behalf of the Issuer:

By:............................................................ By: ....................................................................Duly authorised Duly authorised

Signed on behalf of the Guarantor:

By:............................................................ By: ....................................................................Duly authorised Duly authorised

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PART B – OTHER INFORMATION

1. LISTING

(i) Listing: [Dubai International Financial Exchange/other(specify)/None]

(ii) Admission to trading: [Not Applicable] [Application has been made for theNotes to be admitted to trading on [•] with effectfrom [•].]

2. Ratings

Ratings The Notes to be issued have been rated:

[S & P: [•]]

[Moody’s: [•]]

[Fitch: [•]]

[[Other]: [•]]

The above disclosure should reflect the ratingallocated to Notes of the type being issued under theProgramme generally or, where the issue has beenspecifically rated, that rating.

3. OPERATIONAL INFORMATION

ISIN Code: [•]

Common Code: [•]

[Not Applicable/give name(s) and number(s)]

Delivery: Delivery [against/free of] payment

[•]Names and addresses ofadditional Paying Agent(s) (ifany):

Any clearing system(s) other thanEuroclear Bank S.A./N.V. andClearstream Banking SocieteAnonyme and the relevantidentification number(s):

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General Information

1. The creation and issuance of the Notes has been authorised by the resolutions of theboard of directors of Dubai Holding Commercial Operations MTN Limited and theExecutive Committee of Dubai Holding Commercial Operations Group LLC, in each casedated 14 December 2006.

2. There are no governmental, legal or arbitration proceedings against or affecting theIssuer, nor is the Issuer aware of any pending or threatened proceedings, which are ormight reasonably be expected to be material in the context of the issuance of the Notes.

3. There are no governmental, legal or arbitration proceedings against or affecting theCompany or any of its assets, nor is the Company aware of any pending or threatenedproceedings, which are or might reasonably be expected to be material in the context ofthe issuance of the Notes.

4. There has been no adverse change, or any development reasonably likely to involve anadverse change, in the condition (financial or otherwise) or general affairs of the Issuersince the date of its incorporation that is material in the context of the issuance of theNotes.

5. There has been no adverse change, or any development reasonably likely to involve anadverse change, in the condition (financial or otherwise) or general affairs of theCompany since the date of its incorporation that is material in the context of the issuanceof the Notes.

6. For so long as Notes may be issued pursuant to this Prospectus, copies of the followingdocuments will be available for inspection and copies (together, where necessary, withEnglish translations thereof) may be obtained during normal business hours at thespecified offices of the Paying Agents:

• the Combined Financial Statements;

• the Memorandum and Articles of Association of the Issuer;

• the Articles of Incorporation of the Guarantor;

• this Prospectus and any supplements thereto and any documents incorporated byreference therein;

• the Trust Deed;

• the Agency Agreement;

• the Programme Agreement;

• any Final Terms relating to Notes which are admitted to listing, trading and/orquotation system or listed on any listing authority, stock exchange and/or quotationsystem. In the case of any Notes which are not listed, admitted to trading and/orquoted by any stock exchange and/or quotation system, copies of the relevant FinalTerms will only be available for inspection by a holder of such Notes; and

• in the case of each issue of listed Notes subscribed pursuant to a subscriptionagreement, the subscription agreement or equivalent documents.

7. The Notes will contain the following legends:

“Any United States person who holds this obligation will be subject to limitations underthe United States income tax laws, including the limitations provided in Sections 165(j)and 1287(a) of the Internal Revenue Code”1; and

1 This legend only applies to Notes which have an original maturity of more than 365 days.

82

Level: 8 – From: 8 – Monday, January 22, 2007 – 2:36 pm – mac5 – 3621 Section 05 : 3621 Section 05

“This Note may not be offered, sold or otherwise transferred other than to a QualifiedInvestor as defined in the Offered Securities Rules of the Dubai Financial ServicesAuthority”.

83


Index to the Combined Financial Statements

Page

Independent Auditors’ Report.......................................................................................... F-2

Combined Balance Sheet as at 2004 and 2005 .............................................................. F-3

Combined Statement of Income for the years ended 31 December 2004 and 2005 ........ F-4

Combined Statement of Changes in Equity for the years ended 31 December 2004 and 2005 ........................................................................................................................ F-5

Combined Statement of Cash Flows ................................................................................ F-6

Notes to the Combined Financial Statements as at and for the years ended 31 December 2004 and 2005.......................................................................................... F7-F55

F-1


MJ Stevenson, AH Nasser, P Suddaby and JE Fakhoury are registered as practising auditors with the UAE Ministry of Economy & Planning 1

PricewaterhouseCoopersEmirates Towers OfficesLevel 40P.O. Box 11987, DubaiUnited Arab EmiratesTelephone +971 (4) 3043100Facsimile +971 (4) 3304100e-mail: [email protected]

Independent auditors’ report to the shareholdersof Dubai Holding LLC

We have audited the accompanying combined balance sheet of certain companies (“Dubai Holding –Commercial Operations Group”/“the Group”) within the control of Dubai Holding LLC (“the parentcompany”) as at 31 December 2005 and the related combined statements of income, cash flows andchanges in equity for the year then ended. These combined financial statements have been preparedsolely to assist the management of the parent company in connection with the formation of anintermediate holding company as explained in Note 1. These combined financial statements, set out onpages 2 to 54, are the responsibility of the management of the parent company. Our responsibility is toexpress an opinion on these combined financial statements based on our audit.

We conducted our audit in accordance with International Standards on Auditing. Those Standardsrequire that we plan and perform the audit so as to obtain reasonable assurance about whether thefinancial statements are free from material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the financial statements. An audit also includesassessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audit provides a reasonablebasis for our opinion.

In our opinion, the accompanying combined financial statements have been prepared, in all materialrespects, in accordance with the accounting policies set out in Note 2.

Without qualifying our opinion, we draw attention to the fact that, as explained in Note 1, thesecombined financial statements do not include all entities held under the control of the parent companyand, accordingly, do not represent a set of consolidated financial statements for a parent reporting entityas defined in International Accounting Standard 27 “Consolidated and Separate Financial Statements”.Furthermore, these combined financial statements do not comply with the provisions of InternationalAccounting Standard 14 “Segment Reporting”.

This report is intended solely for the purpose explained in Note 1 and should not be used or distributedto other parties for any other purpose.

28 December 2006

F-2


Dubai Holding - Commercial Operations Group

The notes on pages 6 to 54 form an integral part of these combined financial statements. 2

COMBINED BALANCE SHEET As at 31 December Notes 2005 2004

AED’000 AED’000AssetsNon-current assets Property, plant and equipment 5 19,240,830 625,919Intangible assets 6 83,273 11,256Investment property 7 27,833,835 6,287,053Investment in associates 9 1,827,610 -Investment in joint ventures 11 60,811 27,926Financial assets at fair value through profit or loss 10 432,325 357,156Derivative financial instruments 12 50,397 17,798Trade and other receivables 13 678,896 401,829

---------------------- ----------------------50,207,977 7,728,937

---------------------- ----------------------Current assets Inventories 17 53,788 -Property held for sale 8 24,337,063 1,796,159 Trade and other receivables 13 1,494,753 901,102Derivative financial instruments 12 3,603 -Due from related parties 18 2,790,398 322,354Cash and bank balances 19 1,452,984 867,226

---------------------- ----------------------30,132,589 3,886,841

---------------------- ----------------------Total assets 80,340,566 11,615,778

========== ==========EQUITY AND LIABILITIES Capital and reserves Share capital 20 1,700 1,400Capital contribution 21 189,172 -Reserves 22 3,498,362 17,798Retained earnings 1,705,932 1,010,015

---------------------- ----------------------Total equity 5,395,166 1,029,213

---------------------- ----------------------Non-current liabilitiesBorrowings 25 1,501,509 941,176Government grants 26 51,854,333 5,687,877 Retentions payable 27 91,439 41,314Employees’ end of service benefits 28 84,320 9,192Loans from parent company 18 2,638,531 -

---------------------- ----------------------56,170,132 6,679,559

---------------------- ----------------------Current liabilities Trade and other payables 29 2,669,982 809,232Retentions payable 27 102,275 43,957Borrowings 25 2,291,411 172,539Advances from customers 31 7,016,851 2,497,101 Due to related parties 18 580,685 384,177Loans from parent company 18 307,194 -Derivative financial instruments 12 873 -Government grants 26 5,805,997 -

---------------------- ----------------------18,775,268 3,907,006

---------------------- ----------------------Total equity and liabilities 80,340,566 11,615,778 ========== ==========

These combined financial statements were approved by the management of Dubai Holding LLC on 31 August

2006 and were signed on their behalf by:

H.E. Mohammad Al Gergawi Fadhel Al Ali

Executive Chairman Chief Financial and Operating Officer

F-3



COMBINED STATEMENT OF INCOME

Year ended 31 DecemberNotes 2005 2004

AED’000 AED’000

Continuing operations

Revenue 32 2,645,206 388,263Direct costs (1,488,317) (101,773)

------------------ ---------------Gross profit 1,156,889 286,490

Release of government grants 26 740,880 88,599Net investment income 33 77,899 35,402Other operating income 34 668,828 569,173

------------------ ---------------2,644,496 979,664

Expenses ------------------ ---------------General and administrative 36 (748,855) (232,871)Marketing and selling 37 (352,385) (103,392)Consultancy (60,098) (52,626)Depreciation and amortisation (118,997) (77,712)Other expenses (4,972) (15,465)

------------------ ---------------Total expenses (1,285,307) (482,066)

------------------ ---------------

Operating profit 1,359,189 497,598

Finance costs (net) 38 (161,951) (10,866)Share of loss of associates and joint ventures 9,11 (80,406) (2,074)

------------------ ---------------Profit before income tax 1,116,832 484,658

Income tax expense (50) ------------------- ---------------

Profit for the year from continuing operations 1,116,782 484,658

Discontinued operation

Profit for the year from discontinued operation 41 31,493 20,127Profit from sale of discontinued operation 41 460,696 -

----------------- --------------Profit for the year 1,608,971 504,785

========= =======

F-4


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F-5




COMBINED STATEMENT OF CASH FLOWS

Year ended 31 December2005 2004

Notes AED’000 AED’000

Cash flows from operating activitiesCash generated from operations 43 3,505,125 1,238,499

Payment of employees’ end of service benefits 28 (6,812) (376)---------------------------------------- -----------------------------------

Net cash generated from operating activities 3,498,313 1,238,123--------------------------------------- -----------------------------------

Cash flows from investing activitiesPurchases of property, plant and equipment net ofproject accruals 5 (749,161) (219,046)

Proceeds from sale of property, plant and equipment 1,045,664 195,287Purchases of investment property net of projectaccruals 7 (354,782) (156,913)

Purchases of property held for sale net of projectaccruals 8 (2,217,181) (702,492)

Proceeds from sale of property held for sale 28,856 -Purchase of intangible assets 6 (71,049) (8,858)Loans receivable 15 (17,429) (7,002)Finance leases provided during the year 16 (33,473) (73,227)Recovery of finance lease receivables 16 4,365 4,521Deposits with original maturity of over three months 19 (46,328) 20,150Interest received 46,324 12,662Acquisition of associates and joint ventures 9,11 (2,114,919) (30,000)

-------------------------------------------- ----------------------------------Net cash used in investing activities (4,479,113) (964,918)

Cash flows from financing activitiesBank borrowings received net of repayment 25 1,731,653 (14,285)Interest paid (208,275) (23,528)Loan repaid to parent company (657,855) -Share capital issued - 350

------------------------------------------ --------------------------------------Net cash provided by/(used in) financing activities 865,523 (37,463)

================= ===============(Decrease)/increase in cash and cash equivalents (115,277) 235,742Cash on transfer of entity under common control 1 644,221 -Cash and cash equivalents, beginning of the year 686,282 450,540

----------------------------------------- -------------------------------------Cash and cash equivalents, end of the year 19 1,215,226 686,282

================ ===============

F-6



NOTES TO THE COMBINED FINANCIAL STATEMENTSfor the year ended 31 December 2005

6

1. BASIS OF PREPARATION

These combined financial statements have been prepared by aggregating the consolidated results,assets and liabilities of the following entities, all of which are currently held under the directcontrol of the Dubai Holding LLC (“the parent company”/“DH LLC”):

HoldingpercentageName of entity Place of

incorporationPrinciple activity

2005 2004Tatweer Dubai LLC(“Tatweer”)

UAE Real estate development/ leisureand entertainment

100 100

Al Mada LLC(“Al Mada”)

UAE Infrastructure, real estate andlicensing services

100 100

Dubai Properties LLC(“DP”)

UAE Real estate development 100 100

Dubai InternationalProperties LLC (“DIP”)

UAE Real estate development 100 100

Jumeirah Group LLC(“Jumeirah”)

UAE Hospitality and leisure 100 -

The parent company has undertaken a group restructuring exercise. As a result of this process anintermediate holding company, Dubai Holding Commercial Operations Group LLC (“DHCO”)was incorporated on 1 October 2006 with a view to become the parent company of the five entitieslisted above (“the Group”).

Management have prepared these combined financial statements for the purpose of assessing thefinancial performance and position of this Group in connection with securing a formal credit-ratingassessment for the Group and issuing debt securities on the Dubai International FinancialExchange. It is the intention of management to prepare consolidated financial statements ofDHCO for the year ending 31 December 2006.

These combined financial statements do not represent a set of consolidated financial statements fora parent entity as defined by International Accounting Standard 27 (“IAS”) “Consolidated andSeparate Financial Statements” since:

DHCO was not in existence during the year ended 31 December 2005; andnot all entities held under the common control of the parent company have been included inthese combined financial statements. Entities that are under the direct control of the parentcompany but have been excluded from these combined financial statements, since they arenot expected to be under the direct control of the intermediate holding company, are asfollows:

HoldingpercentageName of entity Place of

incorporationPrinciple activity

2005 2004Dubai Holding LLC UAE Holding company 100 100Dubai International Capital (“DIC”) UAE Private equity 100 100

F-7



NOTES TO THE COMBINED FINANCIAL STATEMENTSfor the year ended 31 December 2005 (continued)

7

1. BASIS OF PREPARATION (continued)

Furthermore, these combined financial statements do not comply with IAS 14 “SegmentalReporting” since they do not provide segment analyses which, under IAS 14 are required by allentities in the process of issuing debt securities in public securities markets.

The parent company’s registered address is PO Box 66000, Dubai United Arab Emirates. Theactivities of the subsidiaries, associates and joint ventures of the Group are set out in notes 2.2, 9and 11.

On 1 February 2005, the assets, liabilities and businesses of Jumeirah Group LLC, which owns andmanages luxury hotels, office and retail facilities in Dubai, London and New York, weretransferred to the parent company by its majority shareholder (henceforth referred to as “theshareholder”). The assets and liabilities, which are listed below, were transferred at net book value.

1 February2005

AED’000ASSETSNon-current assetsProperty, plant and equipment 5,713,250Investment property 1,068,375

---------------------6,781,625--------------------

Current assetsInventories 54,943Trade and other receivables 185,450Due from related parties 4,934Cash and bank balances 644,221

--------------------889,548

---------------------Total assets 7,671,173

---------------------LIABILITIESNon-current liabilitiesLoans from parent company 3,348,505Employees’ end of service benefits 39,428Bank borrowings 689,961

--------------------4,077,894--------------------

Current liabilitiesTrade and other payables 715,056Due to related parties 724Bank borrowings 154,449Loans from parent company 159,078

--------------------1,029,307--------------------

Total liabilities 5,107,201--------------------

NET ASSETS 2,563,972==========

F-8




8

1. BASIS OF PREPARATION (continued)

The results of the business for the period from 1 February 2005 to 31 December 2005 are shownbelow:

1 February2005 to

31 December2005

AED’000

Revenue 1,998,580-------------------

Gross profit 1,175,684-------------------

Other operating income and expenses 4,015-------------------

Operating profit 408,116Finance costs (net) (138,778)

-------------------Profit before taxation 269,338Taxation (50)

--------------------Profit for the period 269,288

==========

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these combined financialstatements are as follows:

2.1 Basis of combination

These combined financial statements relate to the aggregated results, assets and liabilities of theentities listed in Note 1. The combined financial statements have been prepared under thehistorical cost convention as modified by the revaluation of financial assets and liabilities(including derivative financial instruments) at fair value through profit or loss and governmentgrants. Receivable and payable balances and sales and purchases between the entities included inthese combined financial statements have been eliminated.

F-9




9

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

2.1 Basis of combination (continued)

(a) Subsidiary undertakings

Subsidiaries are entities over which the Group has the power to govern the financial and operatingpolicies, generally accompanying a shareholding of more than one half of the voting rights. Theexistence and effect of potential voting rights that are currently exercisable or convertible areconsidered when assessing whether the Group controls another entity. Subsidiaries are fullycombined from the date on which control is transferred to the Group. They are de-combined fromthe date that control ceases.

The purchase method of accounting is used to account for the acquisition of subsidiaries by theGroup. The cost of an acquisition is measured as the fair value of the assets given, equityinstruments issued and liabilities incurred or assumed at the date of exchange plus costs directlyattributable to the acquisition. Identifiable net assets acquired, including separately identifiableintangibles e.g. brand and contingent liabilities assumed in a business combination, are measuredinitially at their fair values at the acquisition date. The excess of the cost of acquisition over thefair value of the Group’s share of identifiable net assets acquired is recorded as goodwill.

Transfer of businesses under common control is accounted for using the predecessor basis ofaccounting applied prospectively. The assets are transferred at their net book values at the dateof the transfer.

A listing of the Group’s subsidiaries included in these financial statements is as follows:

F-10




10



(a) Subsidiary undertakings (continued)

Holdingpercentage

Name of thesubsidiary

Holdingcompany

Place ofincorporation

Nature of business

2005 2004Dubai Towers DohaLLC

DIP Qatar Propertydevelopment

100 -

The Lagoons LLC DIP UAE Propertydevelopment

100 -

Estithmaar RealtyFZ-LLC

DP UAE Real estatedevelopment

100 100

Business Bay LLC DP UAE Propertydevelopment

100 -

Dubai HospitalityLLC

DP UAE Propertydevelopment

100 -

Dubai LandResidences LLC


100 -

Business Bay HotelLLC


100 -

Idama LLC DP UAE Facilitiesmanagement

100 -

Jumeirah BeachResort LLC

Jumeirah UAE Hospitality andleisure

100 -

Emirates TowersLLC


100 -

Madinat JumeirahLLC


100 -

Jumeirah BeachClub LLC


100 -

JumeirahInternational LLC


100 -

JumeirahRestaurants LLC


100 -

Jumeirah RetailLLC


100 -

F-11




11




Holdingpercentage


Holdingcompany


Nature of business

2005 2004JumeirahInternational (UK)Limited

Jumeirah UK Hospitality andleisure

100 -

JumeirahHospitality andLeisure (USA) Inc

Jumeirah USA Hospitality andleisure

100 -

Jumeirah Sales(Ireland) Limited

Jumeirah Ireland Hospitality andleisure

100 -

Dubailand LLC Tatweer UAE Leisure andentertainment

100 100

Dubai HealthcareCity FZ-LLC

Tatweer UAE Healthcareinfrastructure

100 100

Dubai IndustrialCity LLC

Tatweer UAE Real estatedevelopment

100 -

Global Village LLC Tatweer UAE Real estatedevelopment,leisure andentertainment

100 -

Center ofExcellence forPlanning andQuality FZ-LLC

Tatweer UAE Medical services 100 100

Moutamarat (underformation)

Tatweer UAE Manage conferencesand exhibitions

51 -

Tecom InvestmentsFZ-LLC

Al Mada UAE Issue of licences,lease and developproperty

100 100

Arab Media GroupLLC

Al Mada UAE Media, event anddistribution

100 -

Tecom InvestmentsOverseas Ltd

Al Mada Cayman Islands Internationalinvestments

100 -

Al Mada LLC Al Mada UAE Local and regionalinvestments

100 -

Dubai Press ClubFZ-LLC

Al Mada UAE Press club 100 -

F-12




12




Holdingpercentage


Holdingcompany


Nature of business

2005 2004JiWin FZ-LLC Al Mada UAE Public relations

company100 -

E-Hosting DataFortFZ-LLC

Al Mada UAE Hosting and ITsecurity services

100 100

Arabian RadioNetwork FZ-LLC

Al Mada UAE Radio broadcasting 100 100

Al Bayan Al Mada UAE Newspaperpublisher

100 -

Awraq LLC Al Mada UAE Publishing 100 -Done LLC Al Mada UAE Event management 100 -Shoof LLC Al Mada UAE Outdoor advertising 100 -

(b) Transactions eliminated on combination

Inter-company balances and transactions, and any unrealised gains/losses arising from transactionsbetween Group companies being combined, are eliminated in preparing the combined financialstatements.

(c) Associates and Joint Ventures

Associates are all entities over which the Group has significant influence but not control,generally accompanying a shareholding of between 20% and 50% of the voting rights.

A joint venture is a contractual arrangement between the Group and one or more other parties toundertake economic activity that is subject to joint control.

Investments in associates and joint ventures are accounted for using the equity method ofaccounting and are initially recognised at cost. The Group’s share of its joint ventures’/associates’post-acquisition profits or losses is recognised in the combined statement of income and its share ofpost-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisitionmovements are adjusted against the carrying amount of the investment. When the Group’s share oflosses in an associate equals or exceeds its interest in the associate, including any other unsecuredreceivables, the Group does not recognise further losses, unless it has incurred obligations or madepayments on behalf of the associate.

F-13




13



(c) Associates and Joint Ventures (continued)

Unrealised gains on transactions between the Group and its associates and joint ventures areeliminated to the extent of the Group’s interest in the associates/joint ventures. Unrealised lossesare also eliminated unless the transaction provides evidence of impairment of the asset transferred.

The Group’s associate and joint venture stakes considered in these combined financial statementsare disclosed in Notes 9 and 11 respectively.

(d) Combination adjustments

Uniform accounting policies are used for like transactions and events. Therefore, if a subsidiary,associate or joint venture uses different accounting policies from those applied in the combinedfinancial statements, appropriate combination adjustments to align accounting policies are madewhen preparing these combined financial statements.

(e) Discontinued operations

During the year, the Group sold the telecommunications business of Tecom Investment FZ-LLC.The results of this business for the year, and the related profit on disposal, are classified asdiscontinued operations in the combined statement of income.

2.2 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using thecurrency of the primary economic environment in which the entity operates (‘the functionalcurrency’). The combined financial statements are presented in United Arab Emirates Dirhams(“AED”), which is the Group’s functional and presentation currency.

The balances and the transactions denominated in the US dollars (“USD”) have been translatedinto the presentation currency at a fixed rate as the exchange rate of AED to USD has beenpegged since 1981.

(b) Transactions and balances

Transactions denominated in foreign currencies are translated into the functional currency usingthe exchange rates prevailing at the dates of the transactions. Monetary assets and liabilitiesdenominated in foreign currencies are translated into the functional currency at exchange ratesprevailing at the balance sheet date. The resulting exchange differences are dealt with in thecombined statement of income, except when deferred in equity as qualifying cash flow hedges.

F-14




14


2.2 Foreign currency translation (continued)

(b) Transactions and balances (continued)

Translation differences on non-monetary financial assets and liabilities such as equities held atfair value through profit or loss are recognised in the combined statement of income as part ofthe fair value gain or loss.

(c) Subsidiaries

The results and financial positions of all the subsidiaries (none of which has the currency of ahyperinflationary economy) that have a functional currency different from the presentationcurrency are translated into the presentation currency as follows:

(i) assets and liabilities for each balance sheet presented are translated at the closing rate at thedate of the balance sheet;

(ii) income and expenses for each income statement are translated at average exchange rates;and

(iii) all resulting exchange differences are recognised as a separate component of equity called“Translation reserve”.

On combination, exchange differences arising from the translation of the net investment inforeign operations, and of borrowings and other currency instruments designated as hedges ofsuch investments, are taken to equity. When a foreign operation is sold, exchange differencesthat were recorded in equity are recognised in the combined statement of income as part of thegain or loss on sale.

2.3 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, balances in current accounts, call accountsand term deposits with original maturity of less than or equal to three months, net of bankoverdrafts. Bank overdrafts are included in borrowings within current liabilities in the combinedbalance sheet.

F-15




15


2.4 Trade and other receivables

Trade receivables are carried at original invoice amount less provision for impairment, if any. Aprovision for impairment is established when there is objective evidence that the Group will notbe able to collect all amounts due according to the original terms of the receivable. A provisionfor impairment is made for the difference between the carrying amount and the recoverableamount. Bad debts are written off during the year in which they are identified. The amount ofprovision is recognised in the combined statement of income within “general and administrativeexpenses”.

2.5 Inventories

Inventories are stated at the lower of cost and estimated net realisable value. Cost includes allattributable costs and is determined using the weighted average method. Net realisable value isthe estimated selling price in the ordinary course of business less selling expenses.

2.6 Property held for sale

Land and buildings identified as held for sale, including those under construction, are classifiedas such and are stated at the lower of cost and estimated net realisable value. The cost of work-in-progress comprises construction costs, infrastructure costs and other related direct costs. Netrealisable value is the estimated selling price in the ordinary course of business, less cost ofcompletion and selling expenses.

2.7 Financial assets and liabilities

The Group classifies its financial assets and liabilities in the following categories:

(i) Financial assets and liabilities at fair value through profit or loss

All investments in funds are designated as ‘financial assets at fair value through profit or loss’.Management determines the classification of its financial assets at initial recognition. Assets inthis category are classified as non-current assets if they are expected to be realised after morethan 12 months of the balance sheet date.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. They are included in current assets, except for maturitiesgreater than 12 months after the balance sheet date, which are classified as non-current assets.Loans and receivables are classified as trade and other receivables.

F-16




16


2.7 Financial assets and liabilities (continued)

Regular purchases and sales of investments are recognised on trade-date – the date on which theGroup commits to purchase or sell the asset. Investments are initially recognised at fair valueplus transaction costs for all financial assets not carried at fair value through profit or loss.

Financial assets carried at fair value through profit or loss are initially recognised at fair valueand transaction costs are expensed in the combined statement of income. Investments arederecognised when the rights to receive cash flows from the investments have expired or wherethe Group has transferred substantially all risks and rewards of ownership. Financial assets at fairvalue through profit or loss are subsequently carried at fair value. Loans and receivables arecarried at amortised cost using the effective interest method.

Gains or losses arising from changes in the fair value of the ‘financial assets at fair value throughprofit or loss’ category, including interest and dividend income, are presented in the combinedstatement of income within ‘Net investment income’ in the period in which they arise.

The Group assesses at each balance sheet date whether there is objective evidence that afinancial asset or a group of financial assets is impaired. Impairment losses recognised in thecombined statement of income, on equity instruments are not reversed through the combinedstatement of income.

The fair values of quoted investments are based on current bid prices. If the market for afinancial asset is not active (and for unlisted securities), the Group establishes fair value by usingvaluation techniques. These include the use of recent arm’s length transactions, reference toother instruments that are substantially the same, discounted cash flow analysis, and optionpricing models, making maximum use of market inputs and relying as little is possible on entity-specific inputs.

2.8 Derivative financial instruments and hedging activities

Derivatives are initially recognised at fair value on the date a derivative contract is entered intoand are subsequently re-measured at their fair value. The method of recognising the resultinggain or loss depends on whether the derivative is designated as a hedging instrument, and if so,the nature of the item being hedged. The Group designates certain derivatives as either: (1)hedges of the fair value of recognised assets or liabilities (fair value hedge); or (2) hedges of aparticular risk associated with a recognised asset or liability or a highly probable forecasttransaction (cash flow hedge).

The Group documents at the inception of the transaction the relationship between hedginginstruments and hedged items, as well as its risk management objectives and strategy forundertaking various hedge transactions. The Group also documents its assessment, both at hedgeinception and on an ongoing basis, of whether the derivatives that are used in hedgingtransactions are highly effective in offsetting changes in fair values or cash flows of hedgeditems.

F-17




17


2.8 Derivative financial instruments and hedging activities (continued)

The fair values of various derivative instruments used for hedging are disclosed in Note 12. Thefull fair value of a hedging derivative is classified as a non-current asset or liability if theremaining maturity of the hedged item is more than 12 months, and as a current asset or liabilityif the remaining maturity of the hedged item is less than 12 months.

Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges arerecorded in the combined statement of income, together with any changes in the fair value of thehedged asset or liability that are attributable to the hedged risk. The gain or loss relating to theeffective portion of interest rate swaps hedging fixed rate borrowings is recognised in the incomestatement within “finance costs (net)”. The gain or loss relating to the ineffective portion isrecognised in the income statement within “Other gains/(losses)”. Changes in the fair value ofthe hedged fixed rate borrowings attributable to interest rate risk are recognised in the combinedstatement of income within “finance costs (net)”.

If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carryingamount of a hedged item for which the effective interest method is used, is amortised to profit orloss over the period to maturity.

Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify ascash flow hedges are recognised in equity. The gain or loss relating to the ineffective portion isrecognised immediately in the combined statement of income. Amounts accumulated in equityare recycled in the combined statement of income in the periods when the hedged item affectsprofit or loss (for instance when the forecast sale that is hedged takes place). The gain or lossrelating to the effective portion of interest rate swaps hedging the variable rate borrowing isrecognised in the combined statement of income within “finance costs (net)”.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria forhedge accounting, any cumulative gain or loss existing in equity at that time remains in equityand is recognised when the forecast transaction is ultimately recognised in the combinedstatement of income. When a forecast transaction is no longer expected to occur, the cumulativegain or loss that was reported in equity is immediately transferred to the combined statement ofincome.

F-18




18


2.8 Derivative financial instruments and hedging activities (continued)

Hedges used by the Group are:

(a) Foreign currency options

Foreign currency options are contractual agreements under which the seller (writer) grants thepurchaser (holder) the right, but not the obligation, either to buy (a call option) or sell (a putoption) at or by a set date or during a set period, a specific amount of a foreign currency or afinancial instrument at a predetermined price. The seller receives a premium from the purchaserin consideration for the assumption for foreign exchange risk. The Group is exposed to creditrisk on purchased options only, and only to the extent of their carrying amount, which is theirfair value. The Group has accounted for foreign currency options as fair value hedges.

(b) Currency and interest rate swaps

Currency and interest rate swaps are commitments to exchange one set of cash flows for another.Swaps result in an economic exchange of currencies or interest rates (for example, fixed rate forfloating rate) or a combination of all these (i.e. cross-currency interest rate swaps). No exchangeof principal takes place, except for certain currency swaps. The Group’s credit risk represents thepotential cost to replace the interest rate swap contracts if counterparties fail to perform theirobligation. This risk is monitored on an ongoing basis with reference to the current fair value, aproportion of the notional amount of the contracts and the liquidity of the market. The Group hasaccounted for currency and interest rate swaps as cash flow hedges if they meet the followingcriteria:

(i) formal documentation setting out the hedging instrument, hedged item, hedging objective,strategy and relationship is prepared before hedge accounting is applied;

(ii) the hedge is expected to be highly effective in offsetting the risk in the hedged item;

(iii) the hedge is effective on an ongoing basis; and

(iv) the hedge is reliably measurable.

All other currency and interest rate swaps are classified as fair value hedges.

(c) High yield deposits

The interest applied to these deposits is dependent on the overall movement of exchange ratesbetween two identified currencies. The interest is therefore subject to market risk and is fairvalued based on the forecast pattern of the movement in the identified currencies.

F-19




19


2.9 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation. The cost ofproperty, plant and equipment is its purchase cost together with any incidental costs ofacquisition.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, asappropriate, only when it is probable that future economic benefits associated with the item willflow to the Group and the cost of the item can be measured reliably. All other repairs andmaintenance costs are charged to the combined statement of income during the financial periodin which they are incurred.

Depreciation is calculated on the straight-line method, at rates calculated to reduce the cost ofassets to their estimated residual value over their expected useful lives, as follows:

Type of assets Years

Buildings and infrastructure 10 – 35Leasehold improvements 2 – 4Plant, equipment and machinery 3 – 7Furniture, fixtures and office equipment 2 – 4Computer hardware 3Motor vehicles 3Data centre and teleport 20Other assets 3 – 5

Land is not depreciated.

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at eachbalance sheet date. An asset’s carrying amount is written down immediately to its recoverableamount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount.These are included in the combined statement of income.

Capital work in progress is stated at cost and includes property that is being developed for futureuse. When commissioned, capital work in progress is transferred to either investment property orproperty, plant and equipment as appropriate, and depreciated in accordance with Group’spolicy.

F-20




20


2.10 Intangible assets

a) Goodwill

The excess of the cost of an acquisition over the Group’s interest in the fair value of the netidentifiable assets acquired as of the date of the exchange transaction is recorded as goodwill andrecognised as an asset in the balance sheet under “Intangible assets”. Goodwill on acquisitionsof associates is included in “investments in associates”. Separately recognised goodwill is testedannually for impairment and carried at cost less accumulated impairment losses. Impairmentlosses on goodwill are not reversed. Gains and losses on the disposal of an entity include thecarrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. Theallocation is made to those cash-generating units or groups of cash-generating units that areexpected to benefit from the business combination in which the goodwill arose.

b) Brands

Brands are shown at historical cost. Brands have an indefinite useful life. Recognised brand cost istested annually for impairment and carried at initial recognised cost less accumulated impairmentlosses.

c) Master plans

Master plans are shown at historical cost. Master plans have limited useful lives and are carried atcost less accumulated amortisation. Amortisation is calculated using the straight-line method toallocate the cost of the master plans over their estimated useful lives of 3 years.

d) Long-term management contracts

Long-term management contracts comprise costs capitalised for a hotel management contractand are held at historical cost. Amortisation is calculated using the straight-line method toallocate the cost over the contract’s estimated useful life of 15 years.

2.11 Investment property

Investment property comprises property held for capital appreciation, rental yields or both, and ismeasured at cost less accumulated depreciation and impairment losses, if any. In addition, landheld for undetermined use is classified as investment property and is not depreciated.

When the development of an investment property commences, it is transferred to capital work inprogress until development is complete, at which time it is transferred either to investmentproperty or to property, plant and equipment, as appropriate, and depreciated on a straight linemethod, at rates calculated to reduce the cost of assets to their estimated residual value over theirexpected useful lives, as follows:

F-21




21


2.11 Investment property (continued)

Type of assets Years

Buildings and infrastructure 20 – 35Furniture, fixtures and office equipment 2 – 4

When investment property is sold, gains and losses on disposal are determined by reference to itscarrying amount and is taken into account in determining operating profit.

2.12 Impairment of non-financial assets

At each balance sheet date an assessment is made as to whether there is any indication that theGroup’s non-financial assets may be written down. If any such indication exists, an assessmentis made to establish whether the recoverable amount of the assets has declined below thecarrying amount of those assets as disclosed in the combined financial statements. When such adecline has occurred, the carrying amount of the assets is reduced to the recoverable amount.The amount of any such reduction is recognised immediately as an expense in the combinedstatement of income. Any subsequent increase in the recoverable amount of the assets is writtenback when the circumstances that led to the write-down or write-off cease to exist and there ispersuasive evidence that the new circumstances and events will persist for the foreseeable future.

The recoverable amount is determined as the higher of the net selling price of the assets and theirvalue in use. The value in use of the assets is estimated based on forecast future cash inflowsand outflows to be derived from continuing use of the assets and from the estimated net proceedson disposal, discounted to present value using an appropriate discount rate.

2.13 Advances from customers

Instalments received from buyers prior to the transfer of title are recognised as advances fromcustomers. These are considered a current liability as they are repayable on demand oncancellation of the contracts, subject to certain penalties.

2.14 Leases

When assets are leased out under a finance lease, the present value of the lease payments isrecognised as a receivable. The difference between the gross receivable and the present value ofthe receivable is recognised as unearned finance income.

Lease income is recognised over the term of the lease using the net investment method, whichreflects a constant periodic rate of return.

Leases in which a significant portion of the risks and rewards of ownership are retained by thelessor are classified as operating leases. Payments made under operating leases (net of anyincentives received from the lessor) are charged to the combined statement of income on astraight-line basis over the period of the lease.

F-22




22


2.15 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as aresult of past events, it is probable that an outflow of resources will be required to settle theobligation, and a reliable estimate of the amount can be made. Increases in provisions due tothe passage of time are recognised as interest expense.

2.16 Government grants

a) Land

Land granted to the Group by the Government of Dubai is initially recognised as governmentgrant at the fair value determined by an independent valuer prevailing at the time of the grant.This is subsequently released to the combined statement of income as follows:

(i) Where land is held for sale without any further development, the grant is released whensale of the land is recognised.

(ii) Where land is held for development, the grant is released when development on the land, inaccordance with master plans approved by the Group, has commenced.

(iii) Where land is held for leasing (of the land or of property developed on the land), the grantis released on commencement of the lease.

b) Other grants

All other forms of government grants are accounted for under the income approach inaccordance with IAS 20 Accounting for Government Grants and Disclosure of GovernmentAssistance (Note 26).

2.17 Borrowings

Borrowings are recognised initially at fair value net of transaction costs incurred. Borrowings aresubsequently stated at amortised cost; any difference between the proceeds (net of transactioncosts) and the redemption value is recognised in the combined statement of income over theperiod of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right todefer settlement of the liability for at least 12 months after the balance sheet date.

F-23




23


2.18 Employee benefits

(a) End of service benefits to non-UAE nationals

A provision is made for employees employed in the UAE for estimated liability for employees’entitlement to annual leave and leave passage as a result of services rendered by the employeesup to the balance sheet date. Provision is made for the full amount of end of service benefits dueto non-UAE national employees working in the entities based in UAE, in accordance with theUAE Labour Law for their periods of service up to the balance sheet date.

The provision relating to annual leave and leave passage is disclosed as a current liability, whilethat relating to end of service benefits is disclosed as a non-current liability.

(b) Pension and social security policy within the UAE

The Group is a member of the pension scheme operated by the Federal Pension General andSocial Security Authority. Accordingly contributions for eligible UAE National employees aremade and charged to the combined statement of income, in accordance with the provisions ofFederal Law No. 7 for 1999 relating to Pension and Social Security Law. An accrual has beenmade for past contributions relating to the services rendered by the eligible UAE nationalemployees up to 31 December 2002.

2.19 Taxation

Provisioning is based on operating results arising from services rendered by subsidiariesoperating in jurisdictions where corporate income is subject to tax and adjusted for any potentialdisallowances under the relevant taxation rates in accordance with the taxation regulations.

2.20 Revenue recognition

(a) Sales of land and buildings

Revenue from sales of land and buildings is recognised in the combined statement of incomewhen the risks and rewards of ownership are transferred to the buyer, which is deemed to takeplace when legal title passes to the buyer. However, in certain circumstances equitable interestin the land and buildings may vest in the buyer before the legal title passes and therefore therisks and rewards of ownership are transferred at that stage. In such cases, provided that theGroup has no further substantial acts to complete in connection with the sale of the land orbuildings, revenue is recognised when equitable interest in the land or buildings passes to thebuyer. When the aggregate of the payments received, including the buyer’s initial downpayment or continuing payments by the buyer provide insufficient evidence of the buyer’scommitment to complete payment, revenue is recognised only to the extent cash is received.

F-24




24


2.20 Revenue recognition (continued)

(b) Sales of services

Sales are stated net of value added tax, discounts and municipality fees, where applicable. Salesof services are recognised in the accounting period in which the services are rendered.

(c) Rental income

Rental income from operating leases is recognised as income on a straight line basis over thelease term. When the Group provides operating lease incentives to its customers, the aggregatecost of incentives are recognised as a reduction of rental income over the lease term on a straightline basis.

(d) Sales of investments

Revenue from sales of investments is recognised in the combined statement of income when allrisks and rewards of ownership are transferred to the buyer. The difference between the netdisposal proceeds and the carrying amount is charged or credited to the combined statement ofincome.

(e) Interest income

Interest income is recognised in the combined statement of income on a time proportion basisusing the effective interest method.

(f) Dividend income

Dividend income is recognised when the right to receive the dividend is established.

3. FINANCIAL RISK MANAGEMENT

Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including foreignexchange risk and fair value interest rate risk), credit risk, liquidity risk and cash flow interestrate risk. The Group’s overall risk management programme focuses on the unpredictability offinancial markets and seeks to minimise potential adverse effects on the Group’s financialperformance. The Group uses derivative financial instruments to hedge certain risk exposures.

F-25




25

3. FINANCIAL RISK MANAGEMENT (continued)

Financial risk factors (continued)

Foreign exchange risk

The Group has investments in the USA, Europe and Middle East. The Group is not exposed tosignificant currency risk against the US dollar (“USD”), as the UAE Dirham (“AED”) iscurrently pegged to the USD. The Group is exposed to foreign exchange risks primarily withrespect to the Euro and the British Pound (“GBP”). The Group finances overseas investmentsmainly through the use of foreign currency borrowings to hedge the foreign currency investment.The Group uses currency swaps, forward exchange contracts, plain vanilla and other structuredderivatives to hedge and manage foreign exchange risks.

Cash flow and fair value interest rate risk

The Group is exposed to interest rate risk on its interest bearing assets and liabilities (floatingnotes and borrowings). Borrowings at variable rates expose the Group to cash flow interest raterisk. Borrowings at fixed rates expose the Group to fair value interest rate risk. The Groupmanages its interest rate risk by using derivative instruments like interest rate swaps.

Credit risk

The Group is exposed to credit risk in relation to its monetary assets, mainly trade receivables,advances to contractors, derivative assets and bank deposits.

Trade receivables and advances to contractors are either made to customers/contractors with anappropriate credit history or secured by bank guarantees. Advances to contractors are recoveredover the length of the contracts (Note 14). The Group has no other significant concentration ofcredit risk.

Derivative assets and bank deposits are limited to high-credit-quality financial institutions. TheGroup has policies that limit the amount of credit exposure to any financial institution.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities,the availability of funding through an adequate amount of committed credit facilities and theability to close out market positions. Due to the dynamic nature of the underlying businesses, theGroup aims to maintain flexibility in funding by keeping committed credit lines available.

Fair value estimation

The fair value of financial instruments traded in active markets is based on quoted market pricesat the balance sheet date. The quoted market price used for financial assets held by the Group isthe current bid price.

The fair value of financial instruments that are not traded in an active market is based onvaluation techniques. Other receivables and payables approximate their fair values.

F-26




26

4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience andother factors, including expectations of future events that are believed to be reasonable under thecircumstances.

The Group makes estimates and assumptions concerning the future. The resulting accountingestimates will, by definition, seldom equal the related actual results. The estimates andassumptions that have a significant risk of causing a material adjustment to the carrying amountsof assets and liabilities within the next financial year are discussed below.

(a) Impairment charge on intangible assets

Management assesses the impairment of intangible assets whenever events or changes incircumstances indicate that the carrying value may not be recoverable. Factors that areconsidered important which could trigger an impairment review include evidence that there areno profits and cash flows generated from the related asset.

The Group tests annually whether the goodwill and brands have suffered any impairment. Therecoverable amounts of cash-generating units have been determined based on value-in-usecalculations. These calculations require the use of estimates (Note 6).

(b) Fair value of derivatives and other financial instruments

The fair value of financial instruments that are not quoted in active markets are determined byusing valuation techniques. Where valuation techniques (for example, models) are used todetermine fair values, they are validated and periodically reviewed by qualified personnelindependent of the area that created them. All models are currently vetted before they are used,and models are calibrated to ensure that outputs reflect actual data and comparative marketprices. To the extent practical, models use only observable data, however areas such as creditrisk (both own and counterparty), volatilities and correlations require management to makeestimates. Changes in assumptions about these factors could affect the reported fair value offinancial instruments.

F-27


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F-29




29

5. PROPERTY, PLANT AND EQUIPMENT (continued)

Certain bank borrowings are secured by a registered mortgage of AED 675,000,000 (2004: AED675,000,000) over land on which the Jumeirah Beach Hotel is located. The land on which theMadinat Jumeirah Resort is built on is not recorded in these combined financial statements. Theland is held in the name of the shareholder. No amount is payable for the use of this land.

Property, plant and equipment with a carrying amount of AED 3,997,913,000 (2004: Nil) isfurther secured against the loan payable to the parent company (Note 18).

Capital work in progress includes land granted to the Group during the year of AED12,515,000,000 and land contributed by the parent company valued at AED 189,172,000 (2004:Nil) (Note 21).

6. INTANGIBLE ASSETS

Brands Goodwill

Long-termmanagement

contractMaster

plans TotalAED’000 AED’000 AED’000 AED’000 AED’000

At 1 January 2004 - 2,398 - - 2,398Additions - - - 8,858 8,858

---------------------- ------------------------ -------------------- --------------- -----------------------At 1 January 2005 - 2,398 - 8,858 11,256

Additions 4,250 513 67,549 3,500 75,812Amortisation charge - - - (3,795) (3,795)

---------------------- ------------------------ -------------------- --------------- -----------------------At 31 December 2005 4,250 2,911 67,549 8,563 83,273

========== =========== ========= ======= ==========

A Group subsidiary paid USD 18,390,746 to acquire the management contract of a hotel in NewYork. The management contract commences in 2006 and has a 15-year tenor with a terminationclause. Jumeirah Hospitality & Leisure (USA) Inc assumed management of the Jumeirah EssexHouse Hotel on 15 January 2006.

The Group has tested impairment of the goodwill and the brands in relation to two subsidiariesand is of the opinion that no impairment should be recorded. This test was done by calculatingthe net present value of the underlying cash flows and comparing these to the carrying value. Thekey assumptions used were:

BrandsForecast revenues based on past performance and expectations of market developmentBrand rate – 5%Discount factor – 10%

GoodwillForecast cash flows based on past performance and expectations of market developmentGrowth rate – 1.8%Discount factor – 10%

These assumptions have been used for each cash generating unit. Forecast revenues weredetermined based on past performance and future expectations of the market. The weightedaverage growth rates used are consistent with the forecasts included in their forecasts. Thediscount rates used are pre-tax and reflect specific risks relating to the cash generating units.

F-30




30

7. INVESTMENT PROPERTY

Land BuildingsInfra-

structure

Furniture,fixtures and

equipment TotalAED’000 AED’000 AED’000 AED’000 AED’000

CostAt 1 January 2004 - - - - -Transfer of subsidiary 1,942,360 777,349 218,524 - 2,938,233Transfer in 3,419,481 223,826 - - 3,643,307Transfer out (169,515) (12,568) - - (182,083)Disposals (25,754) (2,270) - - (28,024)

------------------------- ------------------------- ------------------------- ------------------------- -------------------------At 31 December 2004 5,166,572 986,337 218,524 - 6,371,433

Transfer of subsidiary (Note 1) 870,632 27,403 - 323,943 1,221,978Additions 25,437,341 235,527 - 1,822 25,674,690Transfer from property, plant

and equipment (Note 5) 200,017 5,497 104,803 - 310,317Transfer from property held for

sale (Note 8) 353,904 - - - 353,904Transfer to property held for

sale (Note 8) (5,655,485) - (3,831) - (5,659,316)Transfer to property, plant and

equipment (Note 5) (40,788) (4,096) - (1,315) (46,199)Disposals (69,610) (2,550) - - (72,160)

------------------------- ------------------------- ------------------------- ------------------------- -------------------------At 31 December 2005 26,262,583 1,248,118 319,496 324,450 28,154,647

------------------------- ------------------------- ------------------------- ------------------------- -------------------------DepreciationAt 1 January 2004 - - - - -Transfer of subsidiary - 53,573 - - 53,573Charge for the year - 12,277 18,530 - 30,807

------------------------- ------------------------- ------------------------- ------------------------- -------------------------At 31 December 2004 - 65,850 18,530 - 84,380

Transfer of subsidiary (Note 1) - 79,988 - 73,615 153,603Charge for the year - 50,842 11,227 26,819 88,888Transfer to property, plant and

equipment (Note 5) - (3,147) - (373) (3,520)Disposals - (2,539) - - (2,539)

------------------------- ------------------------- ------------------------- ------------------------- -------------------------

At 31 December 2005 - 190,994 29,757 100,061 320,812------------------------- ------------------------- ------------------------- ------------------------- -------------------------

Net book value at31 December 2005 26,262,583 1,057,124 289,739 224,389 27,833,835

============ =========== =========== =========== ============31 December 2004 5,166,572 920,487 199,994 - 6,287,053

============ =========== =========== =========== ============

A formal valuation of the investment property has not been undertaken at 31 December 2005,management believes that the fair value at that date is likely to be in the region of AED 86.14billion (2004: AED 44.8 billion) based on comparable market transactions.

F-31




31

8. PROPERTY HELD FOR SALE

LandWork-in-progress Total

AED’000 AED’000 AED’000Cost

At 1 January 2005 786,725 1,009,434 1,796,159Additions 14,848,538 2,601,104 17,449,642Transfer from investment property (Note 7) 5,655,485 3,831 5,659,316Transfer to investment property (Note 7) (353,904) - (353,904)Transfer to property, plant and equipment (Note 5) (165,195) (26,862) (192,057)Disposals (22,093) - (22,093)

--------------------- --------------------- ---------------------At 31 December 2005 20,749,556 3,587,507 24,337,063

========== ========== ==========

9. INVESTMENT IN ASSOCIATES

2005 2004AED’000 AED’000

At 1 January - -Investment during the year 2,078,359 -Share of loss (76,731) -Elimination of related interest in an associate (Note 41) (145,553) -

-------------------------- -----------------------1,856,075 -

Less: exchange differences (28,465) --------------------------- -----------------------

At 31 December 1,827,610 -============ ==========

Investment in associates at 31 December 2005 includes goodwill of AED 244,702,000.

The Group’s share of the results of its principal associates, and its share of the assets, liabilitiesand revenue are presented on the following page:

F-32


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F-33




33

10. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

2005 2004AED’000 AED’000

At 1 January 357,156 321,754Fair value gain (Note 33) 75,169 35,402

-------------------------- -----------------------At 31 December 432,325 357,156

============ ==========

Financial assets at fair value through profit or loss represent a fund managed by DubaiInvestment Group LLC, a related party, having a diversified portfolio with a concentration inreal estate. The return on these investments is linked to the performance of this fund. TheGroup’s share in the change in the net asset value of the fund amounting to AED 75,169,000(2004: AED 35,402,000) is recorded in the combined statement of income as investment income(Note 33).

11. INVESTMENTS IN JOINT VENTURES

2005 2004AED’000 AED’000

At 1 January 27,926 -Investment during the year 36,560 30,000Loss for the year (3,675) (2,074)

------------- -------------At 31 December 60,811 27,926

====== ======

F-34


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F-35


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F-36




36

13. TRADE AND OTHER RECEIVABLES

Trade and other receivables comprise:

2005 2004AED’000 AED’000

CurrentTrade receivables, advances and prepayments (Note 14) 1,477,701 894,892Loans receivable (Note 15) 12,130 1,841Finance lease – net receivables (Note 16) 4,922 4,369

------------------- -----------------1,494,753 901,102========= ========

Non-currentTrade receivables, advances and prepayments (Note 14) 439,034 213,320Accrued income 122,180 106,522Loans receivable (Note 15) 24,790 17,650Finance lease – net receivables (Note16) 92,892 64,337

------------------- -------------------678,896 401,829

========= =========

14. TRADE RECEIVABLES, ADVANCES AND PREPAYMENTS

2005 2004AED’000 AED’000

CurrentTrade receivables 450,365 153,243Less: provision for impairment of receivables (54,567) (15,425)

------------------- -------------------395,798 137,818

Retentions receivable - 4,025Receivables from sale of land 364,164 153,835Prepayments 58,445 22,249Advances to contractors 597,316 552,915Others 61,978 24,050

------------------- ---------------------1,477,701 894,892=========== =========

Non-currentAdvance to contractors 273,913 -Receivables from sale of land 164,747 213,320Other 374 -

----------------- -------------------439,034 213,320

=========== ===========

As at 31 December 2005, seven contractors accounted for 42% (2004: six contractors accountedfor 96%) of the total advances paid to suppliers. Management does not consider this to be a riskas the advances are being recovered on a monthly basis in line with their contracts.

The Group has a broad base of customers with no further concentration of credit risk at 31December 2005.

F-37




37

15. LOANS RECEIVABLE

2005 2004AED’000 AED’000

Loans receivable 36,920 19,491Less: current portion (12,130) (1,841)

------------------- -------------------Non-current portion 24,790 17,650

======== ========

During 2003, the Group extended a loan facility to a tenant for AED 19,491,000 for the purposeof constructing a building in the Free Zone. The interest on the loan is linked to 3-monthLIBOR+1.5%, and is repayable over 40 quarterly instalments commencing on 30 June 2004.

During 2005, the Group provided a loan facility to another tenant for AED 26,700,000 for thepurpose of constructing facilities in the Free Zone. The loan bears interest at 5% per annum andis repayable over 29 monthly instalments commencing February 2006.

16. FINANCE LEASE RECEIVABLES

Finance lease receivables relate to land and building leases with an option given to investors tobuy the properties at the end of the period. The lease period varies between 30 and 50 years. Atthe end of the first period (usually 10 years) the investors have the right to buy the properties at abargain option price. The lease carries interest linked to LIBOR.

2005 2004AED’000 AED’000

At 1 January 68,706 -Additions 33,473 73,227Repayments (4,365) (4,521)

------------- -------------At 31 December 97,814 68,706Less: current portion (4,922) (4,369)

------------- -------------Non-current portion 92,892 64,337

====== ======

A summary of the repayment schedule for the finance lease receivables is presented below:

Within one year 8,131 5,055After one year but not more than five years 32,913 25,276More than 5 years 79,782 40,178

---------------- ----------------120,826 70,509

Unearned future finance income on finance leases (23,012) (1,803)----------------- -----------------

Net investment in finance leases 97,814 68,706======== ========

F-38




38

16. FINANCE LEASE RECEIVABLES (continued)

The net investment in finance leases is analysed as follows:

2005 2004AED’000 AED’000

Within one year 5,982 4,591After one year but not more than five years 28,055 23,984More than 5 years 63,777 40,131

----------------- ---------------97,814 68,706

======== =======

17. INVENTORIES

Goods held for sale 51,425 -Engineering spares and other consumables 5,074 -

------------- -----------56,499 -

Less: Provision for slow moving inventories (2,711) --------------- ------------53,788 -

======= ======

18. RELATED PARTY BALANCES AND TRANSACTIONS

Related parties comprise of the shareholders, key management personnel, associates, jointventures, directors and businesses which are controlled directly or indirectly by the shareholdersor directors or over which they exercise significant management influence. Related partytransactions are entered into in the normal course of business.

a) Significant transactions with related parties during the year include:

2005 2004AED’000 AED’000

AssociatesProfit on sale of discontinued operation (Note 41) 460,696 -

======= =======Parent companyInterest income on funds advanced (Note 38) 6,862 -

======= =======Interest expense on loans from parent company (Note 38) 118,275 -

======= =======

F-39




39

18. RELATED PARTY BALANCES AND TRANSACTIONS (continued)

a) Significant transactions with related parties (continued)

2005 2004AED’000 AED’000

Other related partiesManagement fees earned (Note 34) 2,853 -

======== ========Investment income (Note 10) 75,169 35,402

======== ========Administration charges (Note 36) 66,132 38,054

======== ========Services rendered 8,719 4,929

======== ========Services received 26,233 -

======== ========Dividend declared (Note 30) - 262,093

======== ========

During the year, the Group approved the sale of the assets of its telecommunication operations toEmirates Integrated Telecommunication Company (“du”). The resultant gain on the sale isdisclosed in Note 41.

b) Remuneration of key management personnel

2005 2004Compensation to key management personnel comprises: AED’000 AED’000

Salaries and other short term employee benefits 61,512 3,236Termination benefits 387 196Post employment benefits 251 2

--------------------------- -----------------------62,150 3,434

=========== =========c) Due from related parties comprises:

Due from associates 1,167,886 -Due from joint ventures 62,506 47,886Due from other related parties 15,346 71,006Due from parent company 1,544,660 203,462

------------------- -------------------2,790,398 322,354========= =========

d) Due to related parties comprises:Due to associates 250,000 -Due to joint ventures 1,745 -Due to other related parties 214,583 122,084Due to parent company 114,357 262,093

------------------- -------------------580,685 384,177

========= =========

F-40




40

18. RELATED PARTY BALANCES AND TRANSACTIONS (continued)

e) Loans from parent company2005

AED’000

Balance at 1 January -Transferred in on acquisition of subsidiary (Note 1) 3,507,583Repayment of interest - for current and previous periods (289,942)Repayment of loan principal (271,916)

-------------------Balance at 31 December 2,945,725

=========Analysed as:Due within 1 year 307,194Due after 1 year 2,638,531

-------------------Balance carried forward 2,945,725

=========

The loans carry interest at 0.2% per annum above the Emirates Inter Bank Offer Rate (“EIBOR”)capped at 4.5%. The loan balances are scheduled for repayment over a period of 12 years.Repayments commenced on 31 October 2005. Interest and capital payments are payablequarterly on 31 January, 30 April, 31 July and 31 October each year. The Group has an option topre-pay if its cash flow permits. With effect from 1 February 2005, the interest payable on theloan is considered a current liability and hence accruals at 31 December 2005 include AED22,278,322 of accrued interest.

F-41




41

19. CASH AND CASH EQUIVALENTS

2005 2004AED’000 AED’000

Cash and bank balances including call deposits 783,168 317,025Fixed deposits 669,816 550,201

--------------------- -------------------Cash and bank balances 1,452,984 867,226

Bank overdrafts (Note 25) (154,086) (50,944)Deposits with original maturity of three months or more (83,672) (130,000)

--------------------- -------------------Cash and cash equivalents 1,215,226 686,282

========== =========

Deposits maturing over three months represent USD 22,720,000 (2004: Nil) which is part of astructured transaction to convert Euros to US Dollars. The deposit matures on 26 September2006.

Bank overdrafts carry interest at rates ranging from 4.39% to 4.99% (2004: 1.65% to 3.06%) perannum. Fixed and call deposits bear interest ranging from 0.5% to 4.95% (2004: 0.5% to 3.5%)per annum.

20. SHARE CAPITAL

The authorised and issued share capital of the Group companies is as follows:

Entity No of shares2005 2004

Tatweer Dubai LLC 300 300Al Mada LLC 500 500Dubai Properties LLC 300 300Dubai International Properties LLC 300 300Jumeirah Group LLC 300 -Total 1,700 1,400

All shares are authorised, issued and fully paid up shares of AED 1,000 each.

F-42




42

21. CAPITAL CONTRIBUTION

2005 2004AED’000 AED’000

At 1 January - -Land contributed by the parent company (Note 5) 189,172 -

------------------ -----------------189,172 -

========= ========

22. RESERVES

Fair value reserve 50,397 17,798Statutory reserve (Note 23) 1,323 -Translation reserve (Note 24) (28,671) -Other reserve 3,475,313

------------------ -----------------3,498,362 17,798========= ========

Other reserve arises from the transfer in of Jumeirah during the year (Note 1).

23. STATUTORY RESERVE

In accordance with the Articles of Association, 10% of the profit for the year in each UAElimited liability registered company is transferred to a legal reserve, which is not distributable.Transfers to this reserve are required to be made until such time as it equals at least 50% of thepaid up share capital of the respective companies.

24. TRANSLATION RESERVE

The translation reserve arose on re-translation of the assets and liabilities of foreign subsidiaries,associates and joint ventures within the Group. Upon disposal of such subsidiaries, associatesand joint ventures the reserve will be included within the gain or loss on disposal in thecombined statement of income.

25. BORROWINGS

2005 2004AED’000 AED’000

CurrentBank overdrafts (Note 19) 154,086 50,944Bank borrowings 2,137,325 121,595

----------------------------- ----------------------------2,291,411 172,539========= ========

Non-currentBank borrowings 1,501,509 941,176

========= ========

Details of interest rates, repayment terms and security are disclosed on the following page.

F-43


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F-45




45

25. BORROWINGS (continued)

The maturity of non-current borrowings is as follows:

2005 2004AED’000 AED’000

Between 1 and 2 years 173,082 132,823Between 2 and 5 years 959,077 512,511Over 5 years 369,350 295,842

------------------- -------------------1,501,509 941,176========= ========

26. GOVERNMENT GRANTS

(i) Land2005 2004

AED’000 AED’000

At 1 January 5,687,877 434,500Transfer - 1,826,330Received during the year 52,643,797 3,515,646Released to income during the year (671,344) (88,599)

--------------------- -----------------------At 31 December 57,660,330 5,687,877Less: current portion (5,805,997) -

--------------------- -------------------Non-current portion 51,854,333 5,687,877

========== =========

The above government grants comprise land granted by the Government of Dubai to the Group.

(ii) Other grants

Other government grant income of AED 69,536,000 (2004: Nil) during the year included:

a) AED 55,364,000 relating to the business of Al Bayan Press, Printing and PublishingEstablishment (“Al Bayan”), including all assets and liabilities, both actual and contingentgranted on 1 August 2005 by Dubai Media Incorporated (DMI) to AMG, a wholly ownedsubsidiary of the Group. Assets and liabilities of Al Bayan were recorded in the combinedfinancial statements at fair market value of AED 55,364,000 as of the date of the grant.

b) A cash grant of AED 8,700,000 received by Al Bayan during the year.

c) All other grants amounting to AED 5,472,000.

F-46




46

2005 2004AED’000 AED’000

27. RETENTIONS PAYABLE

Retentions payable 193,714 85,271Less: current portion (102,275) (43,957)

----------------- ------------------Non-current portion 91,439 41,314

======== ========

28. EMPLOYEES’ END OF SERVICE BENEFITS

As at 1 January 9,192 970Transfers in 55,379 3,786Charge for the year 26,561 4,812Payments (6,812) (376)

-------------- -------------As at 31 December 84,320 9,192

======= ======

In accordance with the provisions of IAS 19, management has carried out an exercise to assessthe present value of its obligations as at 31 December 2005, in respect of employees’ end ofservice benefits payable under the UAE labour law. The present value of the obligation as at 31December 2005 is not materially different from the provision computed in accordance with theUAE labour law.

29. TRADE AND OTHER PAYABLES

2005 2004AED'000 AED'000

Project related payables and accruals 1,091,003 396,393Trade payables and accruals 756,056 47,613Other payables 809,691 356,962Deferred revenue 13,232 8,264

------------------- -------------------2,669,982 809,232=========== ===========

30. DIVIDENDS

In the previous year, a final dividend of AED 262,093,000 for the year ended 31 December 2004was declared on 18 December 2004. At 31 December 2005, AED 113,857,000 remains unpaid(Note 18).

F-47




47

31. ADVANCES FROM CUSTOMERS

Advances from customers represent instalments received from customers towards the purchase ofproperty held for development and sale.

2005 2004AED’000 AED’000

32. REVENUE

Room revenue 1,066,286 -Food and beverages 718,260 -Rental income 496,361 256,890Others 364,299 131,373

------------------- -----------------2,645,206 388,263========= ========

33. NET INVESTMENT INCOME

Unrealised gain on assets held at fair value through profit orloss (Note 10) 75,169 35,402

Unrealised net gain on fair valuation of derivatives (Note 12) 2,730 ----------------- ------------

77,899 35,402======== ======

34. OTHER OPERATING INCOME

Profit from sale of granted land 605,244 511,490Write back of credit balances - 36,700Land title transfer fees and late payment fees 33,299 4,641Management fees (Note 18) 2,853 -Zoning fees 7,375 -Others 20,057 16,342

------------------- -----------------668,828 569,173

========= ========

35. PAYROLL AND OTHER BENEFITS

Salaries and allowances 503,710 132,535End-of-service benefits and other benefits 274,687 24,600

--------------------- -----------------778,397 157,135

========== ========

F-48




48

2005 2004AED’000 AED’000

36. GENERAL AND ADMINISTRATIVE EXPENSES

Payroll and related expenses 259,491 102,261Utilities 85,563 -Administration charges (Note 18) 66,132 38,054Bad debts and provision for impairment on receivables 52,830 7,556Office rent 19,540 2,626Donation 50,000 50,000Communication expenses 762 1,141Others 214,537 31,233

------------------- ----------------748,855 232,871

========= =======

37. MARKETING AND SELLING EXPENSES

Advertising 265,199 29,436Promotions 44,697 39,497Sales commissions 36,463 5,280Others 6,026 29,179

----------------- ----------------352,385 103,392

======== =======

38. FINANCE COSTS (NET)

Interest expense:Bank borrowings 84,615 23,528Loans from parent company (Note 18) 118,275 -Other items:Foreign exchange loss 5,385 -

---------------- ----------------208,275 23,528

Finance income: ---------------- ----------------Term deposits (39,462) (12,662)Funds advanced to the parent company (Note 18) (6,862) -

---------------- ----------------(46,324) (12,662)

---------------- ----------------Finance costs (net) 161,951 10,866

======= =======

F-49




49

39. COMMITMENTS

Capital commitments2005 2004

AED’000 AED’000

Property, plant and equipment 387,000 -Real estate projects 6,524,873 4,244,166

-------------------- --------------------6,911,873 4,244,166

-------------------- --------------------Operating lease rentals

At 31 December 2005, commitments under non-cancellable operating leases were:

2005AED'000

Not later than 1 year 8,568Later than 1 year and not later than 5 years 15,9115 years and above 1,212

----------------25,691

----------------

40. CONTINGENT LIABILITIES

As at 31 December 2005, Al Mada had an outstanding letter of guarantee for GBP 56,365 (2004:Nil).

41. DISCONTINUED OPERATIONS

On 1 May 2005, the Group acquired the telecommunications business and assets of SahmTechnologies LLC (“Sahm”) with the intention of combining the business with DIC Telecom(the telecommunications business of Tecom Investment FZ-LLC) and selling the combinedbusiness to du.

The Sahm business contributed revenue of AED 41,732,000 for the period from 1 May 2005 upto 31 December 2005, which forms part of the revenue generated from the DIC Telecombusiness.

F-50




50

41. DISCONTINUED OPERATIONS (continued)

In June 2005, the Group’s management and shareholders approved the sale of the business andassets which related to DIC Telecom to Du, an associate of the Group. The business and assetswere sold on 31 December 2005. The revenue and net results of the DIC Telecom business in 2004and 2005 are as follows:

2005 2004AED’000 AED’000

Revenue 267,582 138,421Operating costs (236,089) (118,294)

------------------ ------------------Profit from DIC Telecom operations 31,493 20,127

========= ========

Information on the cash flows arising from the discontinued operations has not been providedsince it is not practical to isolate the cash flow relating to these operations.

No impairment had to be recorded since the sale price was above the carrying value of the assetssold.

Profit from disposal was determined as follows:

2005AED’000

Sale amount 1,200,000Assumed liability (68,231)Net book value of Sahm and DIC Telecom assets sold (525,520)

------------------606,249

Elimination of profit related to the Group’s interest in the associate (145,553)------------------

Profit from sale of discontinued operations 460,696=========

At 31 December 2005 the sale amount of AED 1.2 billion remained outstanding in respect of theabove disposal.

F-51




51

42. BUSINESS COMBINATIONS

Global Village

On 31 May 2005, Global Village LLC acquired the assets and business of Global Village, agovernment entity established by an Emiri decree.

Details of the acquisition are as follows:

AED’000

Purchase consideration 9,639Less: positive fair value of net assets (9,126)

---------------Goodwill at the date of acquisition 513

=======

The net assets acquired are as follows:

Fair value

Acquiree’scarryingamount

AED’000 AED’000

Brand 4,250 -Trade and other receivables 299 299Due from related parties 358 358Property and equipment 4,219 4,219

------------ ------------9,126 4,876

====== ======

Goodwill is attributable to future growth and profitability of the underlying business.

F-52




52

42. BUSINESS COMBINATIONS (continued)

Al Bayan

On 1 August 2005, the assets, liabilities and businesses of Al Bayan were granted by thegovernment (Dubai Media Incorporated “DMI”) to the company. The fair values of the assetsand liabilities granted, which approximated their carrying values, are as follows:

2005AED’000

Non-current assetsProperty and equipment 83,985Investment property 16,739

-----------------100,724

-----------------Current assetsTrade and other receivables 46,713Cash and cash equivalents 2,652

-----------------49,365

-----------------Total assets 150,089

-----------------

Non-current liabilitiesProvision for employees’ end of service benefits 15,420

-----------------Current liabilitiesBank overdrafts 22,606Trade and other payables 44,794Deferred revenue 11,905

-----------------79,305

-----------------Total liabilities 94,725

========Net assets 55,364

========

The granted business contributed revenues of AED 43,624,000 and a net loss of AED 8,517,000for the period from 1 August 2005 to 31 December 2005. These amounts have been calculatedusing the Group’s accounting policies and by adjusting the results of the granted entity to reflectthe additional depreciation and amortisation that would have been charged assuming the fairvalue adjustments to property, plant and equipment had applied from the date of grant.

F-53




53

43. CASH GENERATED FROM OPERATIONS

2005 2004Notes AED’000 AED’000

Profit for the year 1,608,971 504,785

Adjustments for:Depreciation and amortisation 5,6,7 485,257 77,714Profit on sale of property, plant and equipment (586,166) (504,059)Profit on sale of property held for sale (6,763) -Write-off of investment property 7 69,621 15,463Write off of projects costs - 6,266Unrealised gain on valuation of derivative financial instruments (2,730) -Unrealised gain on assets held at fair value through profit or loss 33 (75,169) (35,402)Share of loss from associates and joint ventures 9,11 80,406 2,074Government grants released to income 26 (740,880) (88,599)Gain on sale of discontinued operation 41 (460,696) -Tax 50 -Impairment write-downs on inventories and receivables 14,17 41,853 7,556Provision for end of service benefits 28 27,092 4,812Exchange movements 157 6Interest income 38 (46,324) (12,662)Interest expense 38 208,275 23,528

---------------------- -------------------602,954 1,482

---------------------- -------------------

Increase in non-current trade receivables 14 (225,714) -Increase in other non-current receivables 13 (15,658) -Increase in non-current retentions payable 27 50,125 -

Changes in working capitalTrade and other receivables before provisions and write-offs 13 389,489 (621,505)Inventories before provision 17 (1,556) -Due from related parties 18 (2,462,752) (322,791)Due to related parties 18 195,784 146,934Trade and other payables excluding project accruals 29 394,385 316,947Advances from customers 31 4,519,750 1,718,026Retentions payable 27 58,318 (594)

----------------------- ---------------------Cash generated from operations 3,505,125 1,238,499

========== =========

Significant non-cash transactions during the year include:

(i) Government grants of land received of AED 52,643,797,000 (2004: AED 3,515,646,000),of which AED 671,344,000 (2004: AED 88,599,000) was released to income during theyear.

(ii) Other non-cash government grants amounting to AED 60,836,000, which have beenreleased to income during the year.

(iii) Capital contributions of AED 189,172,000 (2004: Nil) received during the year.

F-54




54

44. SUBSEQUENT EVENTS

Al Mada has acquired 60% of the share capital of Maltacom (the Maltese telecommunicationscompany) on 18 May 2006 for Euro 220 million and 35% share in Tunisie Telecom Company on17 July 2006 for USD 2.25 billion through a subsidiary in which it holds a 58% interest.Management is still in process of determining the fair values of the assets (including intangibleassets) and liabilities acquired.

Five percent of the Group’s shares in du have been sold through a public offering in the UAEmarket at a profit of AED 406 million.

F-55


REGISTERED OFFICE OF

THE ISSUER

Dubai Holding Commercial Operations MTN LimitedWest Wind Building

Harbour DriveP.O. Box 1111George Town

Grand CaymanCayman Islands

THE GUARANTOR

Dubai Holding Commercial Operations Group LLCP.O. Box 66000

Dubai, United Arab Emirates

ARRANGER

J.P. Morgan Securities Ltd.125 London WallLondon EC2Y 5AJ

England

DEALERS

ABN AMRO Bank N.V. Barclays Bank PLC250 Bishopsgate 5 The North Colonnade

London EC2M 4AA Canary WharfEngland London E14 4BB

England

BNP PARIBAS Citigroup Global Markets Limited10 Harewood Avenue Canada Square

London NW1 6AA Canary WharfEngland London E14 5LB

England

Dresdner Bank Aktiengesellschaft Emirates Bank International PJSCJürgen-Ponto-Platz 1 P.O. Box 2923

60301 Frankfurt am Main Dubai, United Arab EmiratesGermany

HSBC Bank Middle East Limited J.P.Morgan Securities Ltd.P.O. Box 4604 125 London Wall

Dubai, United Arab Emirates London EC2Y 5AJEngland

Mashreqbank psc Standard Chartered BankMashreqbank Building 6 Battery Road

Omer Bin Al Khattab Street #03-00Deira Singapore 049909

P.O. Box 1250Dubai, United Arab Emirates

The Royal Bank of Scotland plc135 Bishopsgate

London EC2M 3UREngland


LEGAL ADVISERS

To the Issuer and the Guarantor as to English To the Issuer as to Cayman Islands’ lawlaw and to the Guarantor as to UAE law

Clifford Chance LLP Maples and Calder3rd Floor, The Exchange Building Dubai International Financial Centre

Dubai International Financial Centre P.O. Box 119980P.O. Box 9380 Dubai, United Arab Emirates


To the Dealers and the Trustee as to English law To the Dealers and the Trustee as to UAE law

Linklaters LinklatersOne Silk Street Suite 4, Third Floor

London EC2Y 8HQ Gate Building 3England Dubai International Financial Centre

P.O. Box 506516Dubai, United Arab Emirates

AUDITORS TO THE GUARANTOR

PricewaterhouseCoopersP.O. Box 11987


TRUSTEE PRINCIPAL PAYING AGENT

HSBC Trustee (C.I.) Limited HSBC Bank plcP.O. Box 88 8 Canada Square

1 Grenville Street London E14 5HQSt. Helier England

Jersey JE4 9PFChannel Islands

PAYING AGENT

HSBC Bank Middle East LimitedHSBC Middle East Building

312/35 Al Auq RoadDubai, United Arab Emirates


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