Crescent Hydropolis Resorts PLC 29 September 2005 Crescent Hydropolis Resorts PLC INTERIM REPORT For the month ended 30 June 2005 INTERIM REPORT Chief Executive's Statement 29 September 2005 Crescent Hydropolis Resorts PLC (CHR), the world's leading developer of ultra- luxury underwater resort hotels and casinos under the Hydropolis design concept first conceived and developed by the German architect and CHR's executive chairman, Joachim Hauser, announces its interim results for the period ended 30 June 2005. The Company had euro4.125.000 in cash at the date of its admission to trading on AIM. The main items of expenditure in the interim accounts relate to the costs of admission and the reimbursement of certain expenses incurred prior to admission. Since then, additional funds have been raised through private placings. These additional funds are being deployed to develop the architectural, design, engineering and feasibility studies for proposed Hydropolis projects. CHR is in active negotiations to launch projects in five locations spanning the globe in both deep and shallow water Hydropolis configurations. In four of the five proposed locations, Landstation towers are planned to accompany the underwater Hydro-Palace structure, thereby enhancing each project's financial feasibility through pre-sales of residential units. Among the proposed locations for Hydropolis properties are Dubai, UAE, as well as locations in North America, along Europe's Mediterranean coastline, in the Indian Ocean and in the Far East. The proposed project for Dubai, while not yet contractually agreed, remains an active and high priority on CHR's roster of planned projects. The Company is presently bringing its Dubai project proposal into compliance with the financing terms and conditions set forth by the Dubai Development and Investment Authority and Dubailand. CHR maintains strong relations with its industrial partners, including Siemens AG, Hydropolis' engineering and technical adviser, Siemens Industrial Building Consultants GmbH, the project manager for each of the proposed Hydropolis properties, Duik Combinatie Nederland BV (DCN), underwater tunnel and concrete experts for Hydropolis' shallow water designs and Ostsee-Kontor, marine and naval consultants on structural design for Hydropolis' deep water Hydro-Palaces. We were pleased to have Siemens Executive Vice President, Joachim Kundt, join CHR's Board of Directors shortly after the Company's listing. As we proceed in executing the Company's business plan, CHR is positioned to develop shareholder value through the implementation of the Hydropolis concept with the announcements of the Company's first actual projects in the months ahead. Mansoor Ijaz, Chief Executive LONDON, 29 September 2005 Contact:- +44 7717 333 137 INDEPENDENT REVIEW REPORT TO CRESCENT HYDROPOLIS RESORTS PLC Introduction The Board of Directors of Crescent Hydropolis Resorts PLC (the Company) have instructed us to review the financial information set out on pages 3 to 7 and we have read the other information contained in the Interim Report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the Company in accordance with Bulletin 1999/4 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review 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, for our review work, for this report, or for the conclusions we have performed. Directors' Responsibilities The Interim Report, including the financial information contained therein, is the responsibility of, and has been approved by the Company's Directors. The Listing Rules of the London Stock Exchange require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review Work Performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. 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. Review conclusion On the basis of our review, we are not aware of any material modifications that should be made to the financial information as presented for the month ended 30 June 2005. CHANTREY VELLACOTT DFK LLP Chartered Accountants London 28 September 2005 UNAUDITED INCOME STATEMENT FOR THE MONTH ENDED 30 JUNE 2005 Note One month ended 30 June 2005 euro'000 Administrative expenses 3 Loss from operations 3 Development costs 5 375 Loss for the period from continuing operations 378 Loss per share 2 Basic (euro0.01) Diluted (euro0.01) The Company's results shown above are derived entirely from continuing activities UNAUDITED STATEMENT OF CHANGES IN EQUITY FOR THE MONTH ENDED 30 JUNE 2005 Share Capital Accumulated Capital Reserves Losses Total euro'000 euro'000 euro'000 euro'000 Balance at 1 June 2005 - - - - Loss for the period - - (378) (378) Total recognised expense for the period - - (378) (378) Issue of share capital 794 33,454 - 34,248 Costs of issue of share capital - (253) - (253) Balance at 30 June 2005 794 33,201 (378) 33,617 UNAUDITED BALANCE SHEET AS AT 30 JUNE 2005 30 June 31 May 2005 2005 Note euro'000 euro'000 ASSETS Non-current assets Intangible assets 42,045 - 42,045 - Current assets Trade and other receivables 155 - Cash and cash equivalents 4,125 - 4,280 - Total assets 46,325 - EQUITY AND LIABILITIES Equity attributable to Equity Holders of the Company Share capital 3 794 - Capital reserves 33,201 - Accumulated losses (378) - 33,617 - Current Liabilities Trade and other liabilities 1,958 - 42,045 - Non-current Liabilities Long term liabilities 4 10,750 - 10,750 - Total Equity and Liabilities 46,325 - Approved by the Board of Directors on 28 September 2005 Signed on behalf of the Board of Directors: Mansoor Ijaz Chief Executive & Director UNAUDITED CASH FLOW STATEMENT FOR THE MONTH ENDED 30 JUNE 2005 One month ended 30 June 2005 euro'000 Cash Flows from Operating Activities Loss from Operations (378) Operating Cash Flows before movement in Working Capital (378) Development costs 375 Increase in receivables (33) Increase in payables 588 Net Cash used in Operating Activities 552 Cash flows from Investing Activities Acquisition of intangible fixed assets (300) Net Cash from Investing Activities (300) Cash Flows from Financing Activities Share capital issued (net of costs) 3,873 Net Cash from Financing Activities 3,873 Net increase/(decrease) in Cash and Cash Equivalents 4,125 Cash and Cash Equivalents at beginning of period - Cash and Cash Equivalents at end of period 4,125 NOTES TO INTERIM REPORT FOR THE MONTH ENDED 30 JUNE 2005 1. Basis of Preparation The Interim Accounts have been prepared in accordance with applicable international accounting standards and the Company's established accounting policies. The Interim Accounts do not constitute statutory accounts within the meaning of S.240 of the Companies Act 1985. 2. Loss per Share One month ended 30 June 2005 euro'000 Loss for the period from continuing operations (378) Number of ordinary shares in issue during the period 79,375,298 Loss per share Basic (euro0.01) There are no dilutive instruments over the period. The loss per share calculation is distorted by accounting requirements to base the period's loss calculations on a weighted share average. As the majority of the Company's shares were issued midway or later through the accounting period, the weighted share average distorts in a material way the loss per share calculation, a fact that must be taken into consideration when reviewing the Company's financial performance. 3. Share Capital 30 June 31 May 2005 2005 euro'000 euro'000 Authorised: 1,000,000,298 ordinary shares of euro0.01 each 10,000 - Called up, allotted and fully paid: Ordinary shares of euro0.01 each 794 - The Company was incorporated on 31 March with an authorised share capital of £2,000 comprising 2,000 ordinary shares of £1 each. On incorporation, the Company issued two ordinary shares of £1 each. On 9 June 2005, 1,998 existing authorised but unissued ordinary shares of £1 each were cancelled. On the same day the authorised share capital was increased to £2 and euro10,000,000 by the creation of 1,000,000,000 Ordinary Shares of euro0.01 each. On the same day, each of the existing issued ordinary shares of £1 each were converted into stock and reconverted into ordinary shares. On 15 June 2005, 12,500,000 ordinary shares were issued fully paid for cash at euro0.01 per share. On 15 June 2005, Hydropolis acquired the Hydropolis Project concept and all the associated know how from Crescent Hydropolis Holdings LLC for a consideration of 60,000,000 ordinary shares issued as fully paid at euro0.50 per share (such shares being issued on 17 June 2005) and payment of euro10,750,000 in cash in instalments with the final payment due in December 2009. On 23 June 2005, Hydropolis raised euro4,125,000 by way of placing, conditional on Admission, 6,875,000 ordinary shares at euro0.60 per share. Issue costs of euro253,000 have been set against the share premium account. 4. Long-Term Liabilities On 15 June 2005, Hydropolis acquired the Hydropolis Project concept and all the associated know how from Crescent Hydropolis Holdings LLC for a consideration of 60,000,000 ordinary shares issued as fully paid at euro0.50 per share (such shares being issued on 17 June 2005) and payment of euro10,750,000 in cash in instalments with the final payment due in December 2009. 5. Development Costs Costs of planning, travel expenditures and other associated matters in connection with the development of the project payable to Crescent Investment Management LLC, a Delaware corporation with its registered office at 100 United Nations Plaza, 44th Floor, New York, NY and a company in which Mr Ijaz and Mr Hauser are interested. COMPANY AND INVESTOR INFORMATION Directors Mr Joachim Hauser Executive Chairman Mr Mansoor Ijaz Chief Executive Mr Joachim Kundt Non-Executive Director Mr Laurence Keenan Non-Executive Director Mr Richard Armstrong Non-Executive Director Registered Office 1 Knightsbridge 4th Floor London SW1X 7LX Nominated Adviser and Broker Nabarro Wells & Co. Limited Saddlers House Gutter Lane London EC2V 6HS Auditors Chantrey Vellacott DFK Russell Square House 10-12 Russell Square London WC1B 5LF Bankers HSBC Bank PLC 70 Pall Mall London SW1Y 5EZ Solicitors McClure Naismith Pountney Hill House 6 Laurence Pountney Hill London EC4R 0BL Registrars Neville Registrars 18 Laurel Lane Halesowen West Midlands BD6 3DA END This information is provided by RNS The company news service from the London Stock Exchange