· ,

30 SEPTEMBER 2008

REPORTSANDFINANClALSTATEMENTS

CIDEFTAIN CONSTRUCTION LIMITED

FOR THE YEAR ENDED

CHIEFTAIN CONSTRUCTION LIMITED

We hereby certify that the attached are a true copy of the Balance Sheet, Profit and Loss Account, Director's Report and Auditor's Report for the year ended 30 September 2008 as laid before the annual general meeting of the company.

Signed:

CIDEFTAIN CONSTRUCTION LIMITED REPORTS AND FINANCIAL STATEMENTS

CONTENTS

DIRECTORS AND OTHER INFORMATION

DIRECTORS' REPORT

STATEMENT OF DIRECTORS' RESPONSIBILITIES

INDEPENDENT AUDITOR'S REPORT

STATEMENT OF ACCOUNTING POLICIES

PROFIT AND LOSS ACCOUNT

BALANCE SHEET

. NOTES TO THE FINANCIAL STATEMENTS

PAGE 2

3-4

5

6-7

8-9

10

11

12 - 21

"

CIDEFT AIN CONSTRUCTION LIMITED DIRECTORS AND OTHER INFORMATION

DIRECTORS

SECRETARY

AUDITORS

BANKERS

SOLICITORS

REGISTERED OFFICE

Gerard O'Rourke Majella McMahon Denis Crehan John Collins Donal Leahy

Sean O'Sullivan

Gerard O'Rourke

Deloitte & Touche Chartered Accountants Deloitte & Touche House Charlotte Quay Limerick

Bank of Ireland Dooradoyle Limerick

Bank of Ireland O'Connell Street Limerick

Anglo Irish Bank Corporation Pic. 98 Henry Street

Limerick'

Ulster Bank Ireland Limited 95 O'Connell Street Limerick

McMahon O'Brien Downes Mount Kennett House Henry Street

Limerick

Alex O'Neill 1 Cecil Street Limerick

Mahon House

Upper William Street Limerick

2

CHIEFf AIN CONSTRUCTION LIMITED DIRECTORS'REPORT

The directors present their annual report and the audited financial statements for the year ended 30 September 200S.

BUSINESS REVIEW AND FUTURE DEVELOPMENT

The principal activity of the company is construction and property development. The property and construction industry experienced very difficult market conditions in 2008. As a consequence, the company recorded a loss before tax of €2,587, 130 for the year as compared to a profit before tax of €S46,910 in 2007. The directors have undertaken a detailed review of the carrying value of its· assets. The operating loss for the year reflects an impairment charge of €3,963,326 (2007: €2,000,000) arising from this review. The company also provided €1 ,500,000 for the non-recoverabi1ity of an intercompany balance due. Whilst the directors recognise continuing difficult trading conditions for 2009, within the current economic environment, the company remains focused on reducing costs, maximising sales and managing cash balances, to position the company for market recovery. The directors are currently reviewing borrowing facilities with the bankers to ensure that adequate funding is maintained to ensure the orderly completion of the projects currently taking place and to meet continuing working capital requirements. The directors believe that the projects in progress at 30 September 200S will generate future profits for the company and that the affordable value of the company's product will provide a market advantage when the market recovers.

RESULTS AND DIVIDENDS

Loss for the year amounted to €3,919,348 after exceptional costs of €5,463,326 (2007: profit: €582,923 after exceptional costs of €2,000,000). A dividend of €40,4S8 (2007: €32,S97) has been paid.

RISKS AND UNCERTAINTIES

Withstanding the effects of the general economic downturn in the construction and property industry is the most significant current challenge for the company. In meeting these operating conditions, the directors' focus is on decreasing the company's cost base, reducing debt and maximising its cash flow.

The company seeks to maintain a competitive advantage through site location, product quality, affordability and product innovation. In addition to development projects in the Republic of Ireland the company seeks diversification through new geographical locations where demand is apparent.

The company's results from operations are in the main affected by movements in exchange rates between the Euro and Sterling and South African Rand.

The company has a number of debt facilities to fund operational and development activities. Honouring all related covenants and maintaining the support of the company's bankers is an area of key focus for the directors.

SUBSIDIARY UNDERTAKINGS

Details of the company's subsidiary undertakings are set out in note 10 to the financial statements.

3

CIDEFT AIN CONSTRUCTION LIMITED DIRECTORS' REPORT-CONTINUED

DIRECTORS

The present membership of the board is set out on page 2. The directors are not required to retire by rotation. All directors served throughout the year.

DIRECTORS' AND SECRETARY'S INTERESTS IN SHARES

The directors and secretary who held office at 30 September 2008 had the following interest in Chieftain Construction Holdings Limited, the ultimate holding company as stated below:-

30/09/08 Ordinary Shares of€1.27

30109/07 Ordinary Shares of€1.27

Gerard O'Rourke Majella McMahon

990 10

990 10

BOOKS OF ACCOUNT

To ensure that proper books and accounting records are kept in accordance with Section 202 of the Companies Act, 1990, the directors have employed appropriately qualified accounting personnel and have maintained appropriate computerised accounting systems. The books of account are located at the company's office at Mahon House, Upper William Street, Limerick

AUDITORS

The Auditors, Deloitte & Touche; Chartered Accountants, continue in office in accordance with Section 160 (2) of the Companies Act, 1963.

Signed on behalf of the Board

G.O'ROURKE M.McMAHON

)

) DIRECTORS )

Date: 27 November, 2009

___________________________________________________________________________________________________________________________ 4

CHIEFTAIN CONSTRUCTION LIMITED STATEMENT OF DIRECTORS' RESPONSmILITIES

Irish company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the loss of the company for that period. In preparing those financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgments and estimates that are reasonable and prudent; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements are prepared in accordance with accounting standards generally accepted in Ireland and comply with Irish statute comprising the Companies Acts, 1963 to 2009 and the European Communities (Companies: Group Accounts) Regulations, 1992. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

5

Deloitte.

Deloitte & Touche Chartered Accountants & Registered Auditors

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CHIEFTAIN CONSTRUCTION LIMITED

We have audited the financial statements of Chieftain Construction Limited for the year ended 30 September 2008 which comprise the Statement of Accounting Policies, the Profit and Loss Account, the Balance Sheet and the related notes 1 to 24. These financial statements have been prepared under the accounting policies

set out in the statement of accounting policies. .. .

This report is made solely to the company's members,as a body, in accordance with Section 193 of the Companies Act, 1990. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

The directors are responsible for preparing the financial statements, as set out in the Statement of Directors' Responsibilities, in accordance with applicable law and accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland).

Our responsibility, as independent auditor, is to audit the fmancial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

~

We report to you our opinion as to whether the financial statements, give a true and fair view, in accordance

with Generally Accepted Accounting Practice in Ireland, and are properly prepared in accordance with Irish statute comprising the Companies Acts, 1963 to 2009 and the European Communities (Companies: Group Accounts) Regulations, 1992. We also report to you whether in our opinion: proper books of account have been kept by the company; whether, at the balance sheet date, there exists a financial situation requiring the convening _of an. extraordinary general meeting of the company; and whether the information given in the Directors' Report is consistent with the financial statements. In addition, we state whether we haveobtained all information and explanations necessary for the purpose of our audit and whether the company's balance sheet and profit arid loss account are in agreement with the books of account.

We also report to you if, in our opinion, any information specified by law regarding directors' remuneration and directors' transactions is not disclosed and, where practicable, include such information in our report ..

We read the Directors' Report and consider the implications for our report if we become aware of any apparent misstatement within it. Our responsibilities do not extend to other information.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed.

Continued on the next pagel

Members of

Deloitte Touche Tohmatsu 6

· .

Oeloitte.

/Continued from the previous page

INDEPENDENT AUDITOR'S REPORt TO THE MEMBERS OF CHIEFTAIN CONSTRUCTION LIMITED

We planned and pe~ormed our audit so as to obtain all the information and explanations which we consld.ered necessary ill order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we evaiuated the overall adequacy of the presentation of information in the financial statements.

Opinion

In our opinion the financial statements:

• give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, of the state of affairs of the company as at 30 September 2008 and of the loss for the year then ended; and

• have been properly prepared in accordance with the Companies Acts, 1963 to 2009 and the European Communities (Companies: Group Accounts) Regulations, 1992.

Emphasis of matter - Going Concern

Without qualifying our opinion, we draw your attention to Note 1 to the financial statements which iri.Q_iciites that the company incurred a loss of€3,919,348 for the year after exceptional costs.of€5,463,326 and that the company is currently reviewing its borrowing facilities with its bankers. These conditions indicate. the existence of a material uncertainty which may cast doubt on the ability of the company to continue as a going concern. The company is dependent upon the continued support of its bankers in relation to its existing facilities and the bank's commitment to continuing to provide sufficient banking facilities for a period of not less than twelve months from date of approval of the financial statements. Based on regular discussions with the bankers, the directors are not aware of any matters to suggest that any required renewal or rescheduling of facilities will not be forthcoming on acceptable terms. The directors have prepared the financial statements of the company on the basis that the company is a going concern. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.

We have. obtained all the information and explanations we considered necessary for the purpose of our audit. In our opinion proper books of account have been kept by the company. The company's balance sheet and profit and loss account are in agreement with the books of account.

In our opinion the information given in the Directors' Report is consistent with the financial statements.

The net assets of the company, as stated in the balance sheet are more than half the amount of its called-up share capital and, in our opinion, on that basis there did not exist at 30 September 2008 a "financial situation which, under Section 400) of the Companies (Amendment) Act, 1983, would require the convening of an extraordinary general meeting of the company.

Chartered Accountants and Registered Auditors Limerick

Date: 27 November, 2009

7

STATEMENT OF ACCOUNTING POLICIES

CHIEFf AIN CONSTRUCTION LIMITED

The significant accounting policies adopted by the company are as follows:

BASIS OF PREPARATION

The financial statements have been prepared in accordance with accounting standards generally accepted in Ireland and Irish statute comprising the Companies Acts, 1963 to 2009 and the European Communities (Companies: Group Accounts) Regulations, 1992.

ACCOUNTiNG CONVENTION

The financial statements have been prepared under the historical cost convention.

T ANGffiLE ASSETS

All tangible fixed assets are stated at cost less accumulated depreciation. Depreciation is not provided on buildings on the basis that these properties are in good repair and it is considered that residual values are such that depreciation is not significant. On other assets it is provided for on a reducing balance basis over the estimated useful lives of the assets. The annual rates of depreciation are as follows:

Plant & Machinery Fixtures & Fittings Motor Vehicles

Leased Motor Vehicles Office Equipment Computer Equipment Leased Equipment

15% Reducing Balance 15% Reducing Balance 20% Reducing Balance 20% Reducing Balance 15% Reducing Balance 20% Reducing Balance 15% Reducing Balance

STOCKS AND WORK IN PROGRESS

Site Costs:

Site cost is valued at the lower of cost and net realisable value.

Work in progress:

Work in progress andlor completed units unsold at the balance sheet date are valued at the lower of cost and net realisable value. Cost represents all construction development costs. Net realisable value represents estimated selling prices of the construction work less all further costs of development and all costs expected to be incurred in marketing and selling.

Long term contracts:

Long term contracts are assessed on a contract by contract basis and are reflected in the profit and loss account by recording turnover and related costs as contract activity progresses. No profit is recognised until the outcome of a long term contract can be assessed with reasonable certainty. Work in progress represents costs incurred net of amounts, transferred to cost of sales, less foreseeable losses and applicable payments on account not matched with turnover.

The amount by which recorded turnover in excess of payments on account of individual contracts is classified as amounts recoverable on contracts and included within debtors. The balance of payments received on account of individual contracts in excess of amounts matched with turnover and offset against long term contract work in progress balances are classified as payments on account and included within creditors. The amount by which the provision for foreseeable losses exceeds the costs incurred after transfers to cost of sales is included within provisions for liabilities and charges.

8

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CHIEFTAIN CONSTRUCTION LIMITED

STATEMENT OF ACCOUNTING POLICIES - CONTINUED

FINANCIAL ASSETS

Investments in subsidiary companies are stated in the holding company's balance sheet at cost, less provision for any permanent diminution in value.

Unquoted investments are stated at cost, less provision for any permanent diminution in value.

TAXATION

The charge for the year is based on the result for the year. Deferred taxation is calculated on the difference between the. company's taxable profits and the results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

LEASED ASSETS

Tangible fixed assets acquired under finance leases are included in the balance sheet at their equivalent capital value and are depreciated over the shorter of the lease term and their useful lives. The corresponding liabilities are recorded as a creditor and the interest element of the finance lease rentals is charged to the profit and loss account on an annuity basis. Operating lease rentals are charged to the profit and loss account on a straight line basis over the lease term.

PENSION COSTS

Retirement benefits to certain. employees are met by payments to a defined contribution pension fund. Contributions are charged to the profit and loss account in the year in which they fall due.

FOREIGN CURRENCIES

Transactions denominated in foreign currencies relating to revenues, costs and non-monetary assets are translated into Euro at the rate of exchange ruling on the date on which the transaction occurred.

Monetary assets and liabilities denominated in foreign currencies are translated into EUTO at the rate of exchange

ruling on the balance sheet date. Resulting profits or losses are dealt with in the profit and loss account. .

The company's net assets/(liabilities) in respect of overseas branches, are translated at the rate ruling at the balance sheet date. The profits and losses of overseas branches, are translated at average rates for the year. Exchange differences resulting from the retranslation of the opening balance sheet amounts in respect of overseas branches, at closing rates, together with the differences on the translation of the profit and loss accounts, are dealt with through reserves.

9

CHIEFI AIN CONSTRUCTION LIMITED PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED 30 SEPTEMBER 2008

2008 2007
Note € E.
TURNOVER 2 17,430,719 43,817,650
Cost of Sales (12,452,390) (32,468,634 )
Exceptional item 4(i) (3,963,326) (2,000,000)
GROSS PROFIT 1,015,003 9,349,016
Distribution expenses (324,523) (473,333)
Administrative expenses (2,540,357) (7,833,071 )
Exceptional item 4(ii) (1,500,000)
OPERATING (LOSS)IPROFIT (3,349,877) 1,042,612
Interest payable and similar charges 5 (760,529) (275,393)
Share of attributable partnership profits 23,276 79,691
(LOSS)IPROFIT BEFORE TAXATION 6 (4,087,130) 846,910
Taxation 7 167,782 (263,987)
(LOSS)IPROFIT FOR THE FINANCIAL YEAR (3,919,348) 582.923 Apart from the translation adjustment as noted at note 19, there were no recognised gains or losses during the year other than those included in the profit and loss account. Accordingly. no separate statement of total recognised gains and losses has been presented and all results derive from continuing operations.

The fmancial statements were approved by the board of directors on 27 November, 2009 and signed on its behalf

by:- .

G.O'ROURKE

)

) DIRECTORS )

M.McMAHON

10

CHIEFf AIN CONSTRUCTION LIMITED
BALANCE SHEET AS AT 30 SEPTEMBER 2008
2008 2007
Note e €
FIXED ASSETS
Tangible assets 9 1,919,238 2,410,819
Financial assets 10 3,067 3,067
1,922,305 2,413,886
CURRENT ASSETS
Stocks 11 42,058,440 46,658,963
Debtors 12 46,291,050 40,450,658
Cash at bank and in hand 78,862 2,484,547
88,428,352 89,594,168
CREDITORS (Amounts falling due
within one year) 13 (56,929,386) (48,049,644)
NET CURRENT ASSETS 31,498,966 41,544,524
TOTAL ASSETS LESS CURRENT
LIABILITIES 33,421,271 43,958,410
CREDITORS (Amounts falling due after more
then one year) 14. (33,039,640) (39,661,613)
381,631 4,296,797 CAPITAL AND RESERVES Called up share capital

Profit and loss account Translation adjustment

17 18

3 291,684 89,944

3 4,251,520 45,274

SHAREHOLDERS' FUNDS

19

381,631

4,296,797

The financial statements were approved by the board of directors on 27 November, 2009 and signed on its behalf by:-

G.O'ROURKE

)

) DIRECTORS )

M.McMAHON

II

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CHIEFf AIN CONSTRUCTION LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2008

1. BASIS OF PREPARATION - GOING CONCERN

The financial statements have been prepared on the going concern basis which assumes that the company will continue in operational existence for the foreseeable future. In considering the going concern basis, the board notes the reported loss for the year of €3,919,348. The losses suffered in the current year were after write downs of €3,963,326, to the canying value of stocks and work in progress and also to other related deferred contract costs. The company also provided €1,500,000 for the non-recoverability of an intercompany balance receivable.

The current property market is such, that sales activity has slowed, requiring an ongoing dependency on bank and related borrowings to finance same. While such facilities (note 15) are in the main structured by the banks as demand facilities, a substantial amount of the loans drawn down are considered to be longer term reflecting the anticipated period of site acquisition, development and completion of sales. The company is currently reviewing its borrowing facilities with its bankers and based on regular discussions with its bankers is not aware of any matters to indicate that any required renewal or rescheduling of facilities will not be forthcoming on acceptable terms.

The validity of the going concern assumption is dependent upon the company generating sufficient revenues and on maintaining sufficient levels of bank finance, to enable it have adequate cash resources to meet its working capital needs for a period of not less than 12 months from the date of approval of the financial statements and to enable the company meet its liabilities as they fall due.

After making enquiries, and considering the uncertainties described above, the directors have a reasonable expectation that the company will generate sufficient revenues and maintain sufficient levels of funding to enable it to have adequate cash resources to meet its working capital needs for a period of at least 12 months from the date of approval of the financial statements and to enable the company to meet its liabilities as they fall due. On this basis the directors consider that it is appropriate for the financial statements to be prepared on the going concern basis. The financial statements do not include any adjustments that would be necessary if the company were unable to continue as a going concern.

2. TURNOVER

Turnover comprises the sale of houses, apartments and land supplied by the company, exclusive of trade discounts and value added tax. Also included in turnover is the value of long term contract activity in the financial period.

Geographical analysis of turnover

2008 €

2007 €

Republic of Ireland South Africa

38,986,685 4,830,965

16,261,341 1,169,378

17,430,719

43,817,650

12

CHIEFf AIN CONSTRUCTION LIMITED

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 30 SEPTEMBER 2008

3. EMPLOYEES AND REMUNERATION

The average number of persons employed by the company during the year analysed by category, was as follows:-

2008

2007

Administration Other

16 25

16 82

41

98

The aggregate payroll costs of these persons were as follows:-

2008 €

2007 €

Wages and salaries Social welfare costs Pension

Deferred in balance sheet

2,328,272 279,870 46,093

6,518,856 627,433 298,406 (337,030)

2,654,235

7,107,665

4. EXCEPTIONAL ITEM

(i) Provision/or impairment

The directors have made a provision for impairment amounting to €3,963,326 (2007: €2,000,000) in

respect of site costs recorded.

(ii) Non-recoverable intercompany debt

The directors have made a provision for the non-recoverability of an intercompany balance receivable amounting to €1,500,000 (2007: Nil).

5. INTEREST PAYABLE AND SIMILAR 2008 2007
CHARGES € €
Interest payable on bank borrowings 737,014 251,468
Finance lease interest and charges 23,515 23,925
760,529 275,393 13

CHIEIT AIN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
FOR THE YEAR ENDED 30 SEPTEMBER 2008
6. (LOSS)/PROFIT BEFORE TAXATION 2008 2007
€ €
(Loss)/profit before taxation is stated after charging:
Directors' fees
Directors' remuneration including pension costs 532,293 761,745
Auditors' remuneration 55,000 55,000
Depreciation 349,461· 418,124 '
Loss on disposal of tangible fixed assets 10,757 975
7. TAXATION 2008 2007
e €
Corporation tax (235,667) 230,091
Over/under provision in prior year 11,687 3,124
Deferred tax chargel(credit) 56,198 30,772
(167,782) 263,987
The company's profits are subject to taxation at a rate of 12V2%.
2008 2007
Factors affecting tax charge for the year: € €
(Loss)/profit before tax (4,087,130) 846,910
(Loss)/profit multiplied by effective rate
of corporation tax of 12V2% (510,891) 105,864
Effects of:
Expenses not deducted for tax purposes 64,021 (50,246)
Capital allowances in excess of depreciation 19,282 26,755
Effect of income taxable at higher tax rate 3,573 123,793
DIRT (5,577)
Group relief 29,502
Losses utilised (99,626)
Losses carried forward 431,160
Losses carried back (235,667)
Chargeable gains 92,481
Current tax' charge for the year (235,667) 230,091
8. DIVIDENDS 2008 2007
€ €
Dividend paid of€20,244 (2007: 16,448.50) per
share on ordinary shares of €1.27 each 40,488 32,897
40,488 32,897
14 CHIEFTAIN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
FOR THE YEAR ENDED 30 SEPTEMBER 2008
9. TANGffiLE ASSETS Freehold Leased &
Property & Leased Owned
Investment Plant & Motor Motor Equipment
Properties Machinery Vehicles Vehicles & Fixtures Total
€ € € € € €
COST
At 1 October 2007 315,346 1,064,725 101,846 307,747 2,062,604 3,852,268
Additions 2,740 23,939 65,045 151,888 243,612
Disposals (233,632) (25,176) (96,329) (145,320) (500,457)
Translation adjustment (17,222) (17,222)
At 30 September 2008 81,714 1,050,243 100,609 276,463 2,069,172 3,578,201
DEPRECIA nON
At 1 October 2007 417,392 22,816 98,518 902,723 1,441,449
Charge for the year 91,765 29,341 33,958 194,397 349,461
On disposals (10,823) (44,137) (75,252) (130,212)
Translation adjustment (1,735) (1,735)
At 30 September 2008 507,422 41,334 88,339 1,021,868 1,658,963
NET BOOK VALUE
At 30 September 2008 81,714 542,821 59,275 188,124 1,047,304 1,919,238
At 30 September 2007 315,346 647,333 79,030 209,229 1,159,881 2,410,819 Included within the net book value of fixed assets is €740,826 (2007: €805,441) relating to assets held under fmance lease and hire purchase agreements.

15

CHIEFfAIN CONSTRUCTION LIMITED

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 30 SEPTEMBER 2008

10. FINANCIAL ASSETS 2008 2007
€ €
Shares in subsidiary companies (unlisted) at cost:
Lexington Residential Development Inc. 8 8
Chieftain Construction US, Inc. 8 8
Lexington Construction LLC
Centauros Properties, SL 3,050 3,050
N ewtownmahon Courtyard Limited 1 1
3,067 3,067 In the opinion of the directors, the net realisable value of the unlisted investments is not less than the net book value:

Subsidiary 0/0 owned Registered office Nature of business
Lexington Residential 100% Brown, Udell and Pomerantz Property
Development Inc. l332 North Halstead - Suite 100 development
Chicago, illinois 60622, USA
. Chieftain Construction US, Inc 100% Brown, Udell and Pomerantz Property
1332 North Halstead - Suite 100 development
Chicago, illinois 60622, USA
Lexington Construction LLC 100% Brown, Udell and Pomerantz Property
1332 North Halstead - Suite 100 development
Chicago, illinois 60622, USA
Centauros Properties, SL 100% Avda, Ricardo Soniano, 12, la-4 Investment in
Edificio Marques de Salamanca property
29600 Marbella, Malaga, Spain
Newtownmahon Courtyard 50% Mahon House Management
Limited Upper William Street company
Limerick Chieftain Construction Limited has a branch operating in South Africa.

The company is a subsidiary undertaking of a European Union parent and the company is therefore exempt from the requirement to prepare consolidated financial statements by virtue of Regulation 9 of the European Communities (Companies: Group Accounts) Regulations, 1992. Consequently these fmancial statements deal with the results of the company as a sirigle entity.

11. STOCKS 2008 2007
e €
Raw materials 330,000 98,200
Work in progress 20,323,645 22,046,331
Site cost of site development 21,404,795 24,514,432
42,058,440 46,658,963 Sites and work in progress have been stated at the lower of cost and net realisable value. At the balance sheet date the directors have made a provision for impairment of stocks and other related deferred contract costs of €5,963,326 (2007: €2,000,000). The directors believe that this is appropriate, in recognition of current market conditions and having reviewed recent sales prices for the company's respective stock lines.

16

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CHIEFf AIN CONSTRUCTION LIMITED
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED
FOR THE YEAR ENDED 30 SEPTEMBER 2008
2008 2007
12. DEBTORS € €
Trade debtors 15,389
Amounts owed by group undertakings 26,924,334 22,725,306
Amounts owed by related parties (note 20) 293,439 182,509
Amounts recoverable from partnership (note 20) 1,048,535 2,123,574
Prepayments 12,170,367 10,027,654
Other debtors 621,036 641,348
Deferred tax (note 16) 56,198
Amounts recoverable on contracts 5,217,950 4,694,069
46,291,050 40,450,658
13. CREDITORS (Amounts falling due 2008 2007
within one year) € €
Bank loans and overdrafts (note 15) 10,002,431 2,342,944
Trade creditors 2,461,073 4,597,418
Corporation tax (300,187) (79,261 )
Amounts owed to group undertakings 33,109,874 28,881,540
Amounts owed to related parties (note 20) 6,497,306 3,101,745
Accruals and deferred income 1,703,925 3,833,215
PAYEIPRSI 93,759 428,057
Directors' current account 1,853,763 4,370,926
VAT 2,287,936 308,030
Obligations under finance leases
and hire purchase agreements (note 21) 219,506 265,030
56,929,386 48,049,644
14. CREDITORS (Amounts falling due 2008 '2007
after more than one year) € €
Bank loans and overdrafts (note 15) 32,929,976 39,474,386
Obligations under finance leases and
hire purchase agreements (note 21) 109,664 187,227
33,039,640 39,661,613 17

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CHIEF[ AIN CONSTRUCTION LIMITED

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 30 SEPTEMBER 2008

15. BANK LOANS AND OVERDRAFTS

2008 2007
€ €
817,015
42,115,392 . 41,817,330
42,932,407 41,817,330
(10,002,431) (2,342,944)
32,929,976 39,474,386 Bank overdrafts Bank loans

Less: amounts falling due within one year (note l3)

Amounts falling due after more than one year (note 14)

(i) Bank loans with Anglo Irish Bank Corporation and Allied Irish Banks are secured on various lands held by the company.

(ii) Anglo Irish Bank Corporation have granted a guarantee amounting to €2 million in favour of Bank of Ireland, secured on lands of a fellow group company held at Coonagh Cross, Limerick.

(iii) Anglo Irish Bank Corporation hold a letter of guarantee from a director of the company amounting to €3 million and Stg£1.5m respectively.

16. PROVISIONS FOR LIABILITIES AND CHARGES

Deferred taxation

The potential amounts of deferred taxation are provided in the fmancial statements as follows:- 2008

€

2007 €

. Writing down allowances in excess of depreciation Finance lease payments in excess of depreciation Other timing differences

12,874 52,483 (121,555)

(56,198)

17. CALLED UP SHARE CAPITAL

2008 €

2007 €

Authorised:

100 ordinary shares of €1.26973 8 each

127

127

Allotted, issued and fully paid:

2 Ordinary shares of €1.269738 each

3

3

18

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CHIEFf AIN CONSTRUCTION LIMITED

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 30 SEPTEMBER 2008

18. PROFIT AND LOSS ACCOUNT 2008 2007
€ €
At 1 October 4,251,520 3,701,494
(Lossj/profit for the financial year (3,919,348) 582,923
Dividend paid (40,488) (32,897)
At 30 September 291,684 4,251,520 19. RECONCILIATION OF MOVEMENT IN 2008 2007
SHAREHOLDERS' FUNDS € €
(Loss )/profit for the financial year (3,919,348) 582,923
Dividend paid (40,488) (32,897)
Translation adjustment 44,670 (1,783)
Opening shareholders' funds 4,296,797 3,748,554
Closing shareholders' funds 381,631 4,296,797 20. RELATED PARTY TRANSACTIONS

The company has availed of the exemptions available under FRS 8 from disclosure of intergroup related party transactions.

Other Related Parties

(a) During the year the company paid €60,OOO to Gerard O'Rourke, a company director, in respect of rent

over the company's premises at Mahon House, Limerick. .

(b) During the year the company recognised' revenue of €50,020 arising from a construction contract with

Donal Leahy, a company director. '

19

.. I. \..

CHIEFr AIN CONSTRUCTION LIMITED

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 30 SEPTEMBER 2008

20. RELATED PARTY TRANSACTIONS - Continued

(c) As at 30 September 2008, the company had the following balances with related parties:

Amounts due from related parties:

2008 €

Zewa Limited

Warnerswell Trading Limited Fastnet Charters Limited

Oakleigh Wood Management Company Limited Coonagh Cross Management Company Limited Premier Estates Limited

City Campus Management Company Limited . Chieftain Capital Limited

Ocean Wave Liinited

Rosnaree Management Company Limited Environmental Electrical Limited Chieftain Global Group Limited Chieftain Racing Limited

107,953

25,050 23,728 902 3,733

518 8,155 2,000 121,400

293,439

Amounts due to related parties:

Rathmore House Management Company Limited MH Partnership

Galeshaw Limited

Wicklow Partnerships

City Campus Management Company Limited Rosnaree Management Company Limited

(1,797) (793,000) (100,000) (5,365,509) (237,000)

(6,497,306)

2007 €

2,004 107,953 100 30,539

26,506

3,733 3,519

8,155

182,509

(1,797) (751,251)

(2,347,838)

(859)

(3,101,745)

The above corporate entities are companies with common directors and are under common control. MH Partnership represents a joint venture in which a group company has a 70% interest. In addition to the balances above, the company's interest in the net assets of MH Partnership less amounts received to date, amounts to €1,048,535 (2007: €2,123,574) at the balance sheet date. Separately, a fellow group

company has a 10% interest in Wicklow Partnership. -

20

CHIEFTAIN CONSTRUCTION LIMITED

NOTES TO THE FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED 30 SEPTEMBER 2008

21. LEASE COMMITMENTS 2008 2007
e €
Financeleases and hire purchase agreements
Payable - within one year 219,506 265,030
within two to five years 109,664 187,227
329;170 452,257 22. PARENT COMPANY

The company is a wholly owned subsidiary of Chieftain Construction Holdings Limited, a company incorporated in the Republic of Ireland.

23. CASH FLOW STATEMENT

In accordance with FRS 1 a cashflow statement is not prepared for the company as the cashflows of the company are included in the consolidated fmancial statements of the holding company.

24. COMPARATIVE AMOUNTS

Comparative amounts have been regrouped where necessary to conform with presentation on the same basis as that for the current year.

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