Residential Property Investment Proposal

Operating Policy

Typically, a property or properties considered suitable for purchase will be identified and offered to the relevant Company, complete with full market appraisal including comparables. The Directors of that Company will then decide whether to proceed with the purchase. Such properties will be offered to each of the Companies in turn on a even-handed basis, as they are identified, and the process will continue until each Company is fully invested.

The purchase and subsequent refurbishment and resale of property (in the case of short-term projects) or subsequent preparation, furnishing, letting and management of properties (in the case of medium-term acquisitions) will be carried out by Andrew Reeves Group Companies in line with pre-defined contracts on preferential commercial terms (for further details see page 22), with full financial reporting being provided to the Companies on a six-monthly basis (as appropriate).
Management Incentive

In order to give the Founders an incentive to maximise the investment opportunities available to the Companies the Founders have been issued with shares which will give them the opportunity to participate in the Companies provided that certain levels of growth are achieved. Consequently, the Founder shares will not participate in any growth until, following a sales or liquidation of the relevant Company, Investors have had returned to them the gross amount of their investment (i.e. 100p per share) and a further 5p per share per annum. Thereafter, any excess will be split as to 70% for Investors and 30% for the Founders. The return to Investors is nevertheless subject to the performance of the Companies and, therefore, there is no guarantee that Investors will realise the sum originally invested (see Risk Factors, page 12).