RISK FACTORS

10.1 Prospective Applicants in the Company should be aware of the risks inherent in owning Shares in the Company. The following risk factors as well as others described or referred to elsewhere in the Prospectus, or any of the Documents Available for Inspection should be considered by each prospective Applicant before deciding how to act with respect to their potential investment.


Performance Risk/Timing of Cashflows
10.2 Performance risk/timing of cashflows of the investment involves the potential passage of time between the date of close of offer and the Hotel’s opening date.. Upon the Hotel, or any part thereof, being declared open for business by the Hotel Operating Company, accrual of Owners’ Share of Rent and Spa Lease Payments begin. While the operators and the investors’ interests are aligned regarding the need to open the Hotel at the earliest possible date in order to maximize the returns that both parties will share, there exists a possibility that deferral in the Hotel Opening Date could happen.



Market Risk
10.3 Market risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market price, whether those changes are caused by factors specific to the individual security or its issuer or factors affecting all securities traded in the market.



Growth Risks
10.4 A key component of the Rent to be generated from the Carlton Savannah Hotel is the sustained occupancy levels projected and the average daily room Rates. However, changes in the supply of rooms and in the nightly room Rates can negatively impact the revenue projections for the Hotel and hence the expected Owner’s Share of Rent. As a result, the financial projections detailed in the Documents Available for Inspection represent the Hotel Operating Company’s best estimate based on currently available information.


Trinidad & Tobago Economy
10.5 The economy of Trinidad & Tobago is projected by international rating agency Standard & Poors to grow at an annual rate of 5.5% for 2008 and 2009. A contributing factor to this growth is oil and gas. The price of oil has risen quite consistently since 1999 when it stood at approximately US$10 per barrel. Business travel for the Trinidad & Tobago economy has links to the underlying economy and the oil and gas industry. Changes in the growth projections for the economy or sustained declines in oil prices could have a negative impact on business travel and hence the projections for occupancy and average room rates at the Carlton Savannah hotel.


Nature of Interest in Leased Property Acquired
10.6 Nature of interest in Leased Property Acquired
The stamping and registration of the Sub-Leases for the Apartments and the Health Club & Spa ("Leased Property") being acquired will not be carried out immediately, so as to defer the costs involved in this exercise (currently 7% of the purchase price or value of the Leased Property at the date of execution of the Sub-Leases). Instead the Deeds Transferring Beneficial Interest will be stamped and registered in the Land Registry in the offices of the Registrar General of Trinidad & Tobago and this will transfer full beneficial interest in the Leased Property to CSRSL (which will be wholly owned by the Company) and confer to it the full right to exercise dominion and control over the Leased Property and the benefits under the contracts in relation thereto. The registration of the Deeds Transferring Beneficial Interest will give notice to all third parties of the interest vested in CSRSL. Note however that until the Sub-Leases are stamped and registered the Developer's name will remain on the register as the owner of the Property and thus it will be recognised as holding the legal interest in the Leased Property. It will, however, be a mere trustee for CSRSL which will have the unfettered right and power to stamp and register the Sub-Leases at any time and thus place its name on the register and be recognised as the holder of the legal title to the Leased Property. Under the laws of Trinidad & Tobago the terms of an unstamped sub-lease cannot be enforced in a court of law unless and until it has been duly stamped and registered, nor can the legal estate in the Leased Property be transferred by CSRSL until such stamping and registration is effected.