Dci Advisors Regulatory News (DCI)

22 March 2011

Dolphin Capital Investors Limited

("Dolphin" or the "Company" and together with its subsidiaries the "Group")

Trading Update and Preliminary Annual Results for the period ended 31 December 2010

Dolphin, a leading global investor in the residential resort sector in emerging markets and the largest real estate company on AIM in terms of net assets, is pleased to announce its preliminary results for the year ended 31 December 2010 and provide an update on operational progress since its last trading update, released on 7 December 2010.

Trading highlights since last trading update of 7 December 2010:

The Porto Heli Collection (www.portohelicollection.com)

·; Construction works are progressing on schedule at the Aman at Porto Heli resort, with the completion of the Aman hotel expected by the end of 2011. The first two fully furnished showcase pavilions are already complete.

·; To date, the Company has drawn down €7 million from the interim facility linked to the €33 million construction loan for the Aman hotel. Moreover the Company has arranged a further €8 million three-year VAT facility to finance the temporary cash outflow for construction cost input VAT, which would be recoverable once the Aman hotel commences its operations.

Venus Rock Golf Resort (www.venusrock.com)

·; The subcontractors for the works of the golf course have been appointed, and works are expected to commence shortly.

·; The applications for the lotting and building permit of the residential developments, related to the already granted golf permits, were submitted in February after a lengthy process of design and consultation with the authorities.

Playa Grande (www.playagrande.com)

·; John Heah has been appointed as new lead architect of the Playa Grande Aman Golf Resort, being the first Aman golf-integrated resort in the world. The masterplan and the concept architectural design for the key project components have already been prepared and approved by Aman Resorts.

·; Preparations for the first phase's infrastructure works and the golf course renovation have been advancing.

·; In order to minimise cash outflows during the development period, an existing project loan with Banco Leon bank has been restructured resulting in a US$1.3 million cash outflow saving for 2011. As part of the restructuring, DCI has agreed to guarantee the interest payments of the US$6 million outstanding loan.

Pearl Island (www.pearlisland.com) 

·; The project has received an "anteproyecto" permit for the development of the Founders' Phase, the first phase of the project to be developed. In addition to commencement of the development process, this permit allows the project to formally launch sales in accordance with the local legislation.

·; The first 34 lots released for sale have been cleared of vegetation, staked and released for sale. Eight sale reservation agreements have already been signed for a total consideration of US$5 million. This implies a sales value of US$176 per land m2 or US$1,226 per buildable m2.

Other

·; Livka Bay Resort, received location permits for the first phase of the project on December 2010. With these permits in place, the first phase of the project is permitted for 77,659m2, which include a 5-star hotel and 40,923m2 of residential real estate.

·; Kea Resort, the site of the second Aman Resort in Greece, received Preliminary Environmental Impact Study ("PEIS") on 27 December 2010. Greek National Tourism Organisation Suitability ("GNTOS") approval was also received on 21 March 2011 and the Environmental Impact Study ("EIS") was submitted on 14 March 2011.

·; 45 homes and plots were sold by Aristo in December, January and February, and first half of March for €8.1 million, representing an 18% decrease in value compared to the same period last year.

·; The first lease agreement was signed with an anchor tenant for 1,900m2 at the Kings Avenue Mall in Central Paphos (fka Athiari) and the leasing of most of the remaining space is in advanced stages of negotiations.

·; A 17.7 hectare land parcel that was not required for the project's development plans within the 461-hectare site of Apollo Heights in Cyprus was sold for €1 million.

·; Two additional units were sold for €0.4 million at LaVanta (Mediterra Resorts).

Placement of Playa Grande Convertible Bonds: 

·; The holding company of Dolphin's Playa Grande project has successfully placed US$40 million of convertible bonds with a 5-year term and a coupon of 7% per annum (the "Bonds"). The Bonds are guaranteed by Dolphin and are convertible either into Dolphin shares at US$0.7998 per share (50p using a US$1.5995 / GBP 1 fixed exchange rate) or into pre-defined Aman Lots (from the first Golf Aman Resort phase to be developed at Playa Grande) at approximately 40% discount to retail prices. The Bonds will be listed on the Open Market of the Frankfurt Stock Exchange (the freiverkehr market) on or about 28 March 2011. The Bonds have been subscribed by both existing Dolphin shareholders and a number of high quality new investors.

·; The proceeds of the Bonds will be mainly allocated to progress the first phase of Playa Grande and to speed up the Founders' (first) phase of Pearl Island.

Financial highlights: 

·; Total Dolphin NAV as at 31 December 2010 was €1.26 billion and €1.14 billion before and after deferred income tax liabilities ("DITL") respectively, representing a decrease of €54 million (4.10%) and €49 million (4.12%), respectively, from 30 September 2010driven mainly by a decrease in the end of year full valuation of Aristo.

·; Sterling NAV per share as at 31 December 2010 before DITL of 173p and after DITL of 156p. This represents a decrease of 4.57% and 4.60% versus 181p and 164p respectively as at 30 September 2010.

·; Balance sheet remains robust:

o Gross Assets of €1.79 billion.

o Group cash balance of approximately €46 million as at 21 March 2011, including the proceeds from the Bonds but excluding the payment of €10 million to be received from Archimedia for the Aman at Porto Heli transaction.

o No bank debt at the Company level and Group debt to total asset value ratio remains low at 22%. The Company has agreed to give corporate guarantees for the servicing of the following loans: €33 million for the Aman at Porto Heli construction facility, US$40 million for the Playa Grande Bonds and the interest on the US$6 million Banco Leon loan at Playa Grande.

o €345 million or approximately 89% of all Group debt held within Aristo and comprising primarily long-term asset-backed loans.

Track Record to date

·; Raised a total of €884 million. Average capital raising price per share of €1.41 vs 31 December 2010 NAV per share of €2.01 (before DITL).

·; Invested approximately €735 million to acquire one of largest seafront developable land portfolios in eastern Mediterranean, Caribbean and Central America.

·; Acquired 100% ownership of Aristo, the largest development company and private real estate owner in Cyprus, which was listed on the Cyprus Stock Exchange, in a pioneering Public-to-Private transaction.

·; Generated over €325 million of sales, which have been executed at a premium to NAV.

·; Arranged approximately €399 million of new bank debt at various project levels and restructured €173 million of other debt.

·; Placed 5-year $40 million of convertible bonds to progress the development of Playa Grande and Pearl Island.

·; Achieved preliminary or final zoning for 12 out of 14 major projects and for almost the entire Aristo land portfolio.

·; Created a unique coastal land portfolio with 59 km beachfront in six countries with current plans for 21 hotels, eight golf courses, five marinas and over 10,000 residential units.

Outlook

In the past year, Dolphin has made considerable progress in advancing its portfolio, securing funding for the first phases of all four of its Advanced Projects while maintaining a very strong capital structure with a net asset position of €1.26 billion (before DITL).

For 2011, the Company's main priorities are:

·; To continue with the development of the first phases of the four Advanced Projects;

·; To achieve more presales of high-end units;

·; To execute medium and large scale joint ventures or exits which increase the Company's cash reserves and demonstrate the underlying value of the Company's portfolio.

While construction of the Advanced Projects is progressing, Dolphin will increasingly invest in the production of attractive marketing material (including brochures, 3D renderings and films, websites, online campaigns) and the setup of the appropriate luxury media and sales channels in key international and regional markets. The Company website (www.dolphinci.com) has also been redesigned and went live on 18 March 2011.

Dolphin will also actively continue to advance the design, permitting and branding process across its remaining Major Projects portfolio with a view to developing or exiting them at the opportune time. Depending on market and funding conditions, the Company may decide to progress the construction of more resorts such as the Nikki Beach Resort at Porto Heli, the Waldorf Astoria at Sitia Bay and the Aman Resort at Kea.

Although the holiday home market is currently far from having fully recovered, the trend is certainly positive and Dolphin is well positioned to offer a range of world class luxury residences to returning buyers and a unique portfolio of coastal projects and land sites to returning investors. Recording more sales and divestments is expected to demonstrate the Company's real estate asset value.

The gross Dolphin portfolio comprises of approximately 63 million m2 of land which has a potential maximum buildable capacity in excess of 6 million m2, representing a building coefficient of less than 10%. The Company's current business plans comprise the development of approximately 2.8 million buildable m2 until 2020. The portfolio value when fully permitted, or the profit potential when developed, amounts to figures that are significantly higher that the current asset valuation which only reflects the portion of the planned buildable m2 that has final construction permits or zoning already and does not reflect any profits from development.

The Investment Manager estimates that the first phases of Dolphin's four Advanced Projects should have a collective profitability potential in excess of €550 million or approximately 77p per share.

Commenting, Andreas N. Papageorghiou, Chairman of Dolphin Capital Investors, said:

"The Company successfully navigated through the third consecutive year of adverse market conditions, paving the way for solid growth in 2011 and beyond. With its strong balance sheet, an outstanding portfolio of assets, the largest development company in Cyprus and four Advanced Projects well-funded, we feel that Dolphin is competitively positioned to take full advantage of the anticipated market recovery and crystallise strong returns for its shareholders."

Miltos Kambourides, founder and Managing Partner of Dolphin Capital Partners, added:

"The emphasis of 2010 was to secure the funding and progress the development of the Advanced Projects. The focus in 2011 is to generate a sales momentum for these projects and establish their value, demonstrating the significant profit potential of the entire Dolphin portfolio."

Conference call for analysts and investors

There will be a conference call at 9.30 a.m. (UK time) on 22 March 2011, which can be accessed using the following dial-in numbers:

International dial-in: +44 (0) 1452 569 393

Password: Dolphin Capital Investors

For further information, please contact:

Notes to Editors

Dolphin is a leading global investor in the residential resort sector in emerging markets and the largest real estate investment company quoted on AIM in terms of net assets. Dolphin seeks to generate strong capital growth for its shareholders by acquiring large seafront sites of striking natural beauty in the eastern Mediterranean, Caribbean and Latin America and establishing sophisticated leisure-integrated residential resorts.

Since its inception in 2005, Dolphin has raised €884 million of equity, has become one of the largest private seafront landowners in Greece and Cyprus and has partnered with some of the world's most recognised architects, golf course designers and hotel operators.

In April 2007, Dolphin acquired Aristo Developers Plc, one of the largest holiday home developers in south-east Europe. This enabled Dolphin to combine its real estate investment expertise with Aristo's leading development experience and local market knowledge.

Dolphin's portfolio is currently spread over approximately 63 million m2 of prime coastal developable land and comprises 14 large-scale, leisure-integrated residential resorts under development in Greece, Cyprus, Croatia, Turkey, Dominican Republic and Panama and more than 60 smaller holiday home projects through Aristo in Cyprus and Greece.

Dolphin is managed by Dolphin Capital Partners, an independent real estate private equity firm.

Chairman's Statement

I am pleased to report Dolphin's preliminary results for the year ended 31 December 2010.

During 2010, the Company achieved a significant milestone with the start of construction works for the first high-end resort of the Dolphin portfolio, the Aman at Porto Heli in Greece. This flagship component of the first phase of The Porto Heli Collection is set to become the first villa-integrated Aman resort in Europe and probably one of the most exclusive destinations in the Mediterranean.

In addition, Dolphin achieved a number of significant planning and development milestones for its other Advanced and Major Projects.

The Company has also met its goal to secure most of the funding required for the first phases of its four Advanced Projects in order to proceed with their construction and release their significant profit potential.

The NAV of the Company, before and after DITL, as at 31 December 2010 is reported at €1.26 billion and €1.14 billion, respectively.

The Company's NAV per share before and after DITL in Euro terms was €2.01 and €1.82 respectively, representing a 5.9% decrease from 31 December 2009. The change was mainly due to a net decrease in the overall portfolio valuation during the year and regular operating expenses.

Real estate values of the Dolphin portfolio had a net decrease of 1.4% in 2010, a rate that is lower than 6.7% in 2009 and 6.2% in 2008, demonstrating signs for stabilisation and eventually growth.

The Investment Manager has successfully navigated the Company through the third consecutive year of adverse market conditions, paving the way for solid growth in 2011 and beyond. Today, Dolphin has a strong balance sheet, an outstanding portfolio of assets, owns the largest development company in Cyprus and has four Advanced Projects that have the majority of their funding requirements in place to complete the first phase of their development and sales. We therefore feel that Dolphin is well positioned to take full advantage of the anticipated market recovery and crystallise strong returns for its shareholders.

Andreas N. Papageorghiou

Chairman

Dolphin Capital Investors Limited

22 March 2011

Investment Manager's Report

Over the last year, we have continued to experience the ripple effects of the severe global financial crisis, making it difficult for Dolphin to sell large assets or stakes in projects as real estate investment activity was concentrated on distressed or commercial assets with stable income that could be acquired often below replacement cost.

Against this backdrop, Dolphin's team worked on maintaining a strong balance sheet, adding value by progressing the design and permitting of the entire portfolio, and financing the first phases of its four Advanced Projects.

With the start of 2011 we have begun to feel a renewed wave of optimism in the markets, including a continued recovery of the US market, a global growth of wealthy individuals looking to purchase luxury products again and increased interest from investors in the hotel and development sector. We look forward to capitalising on the expected return of investor confidence in 2011 and beyond.

We are particularly pleased with the progress achieved with the Aman at Porto Heli. The Aman hotel construction is well under way, fully financed and expected to be completed by the end of 2011. The Aman at Porto Heli is expected to become not only the most exclusive resort in Greece, but a landmark for the next generation of luxury resorts in the Mediterranean and will serve as a showcase of the Dolphin business model.

We look forward to completing the infrastructure work and commencing the construction of the leisure components in the other three Advanced Projects which will assist in generating increased interest at both a retail and investment level. We should note that we are very encouraged by the sales momentum that has been built for Pearl Island: over the past months we have recorded eight reservations for lots and a high level of further interest.

DCI Portfolio potential

The gross Dolphin portfolio comprises of approximately 63 million m2 of land which has a potential maximum buildable capacity in excess of 6 million m2, representing a building coefficient of less than 10%. The Company's current business plans comprise the development of approximately 2.8 million buildable m2 through 2020. Of the total planned buildable, approximately 83% has already been "entitled". For this analysis, we define as "entitled", those buildable m2 which have received either zoning, or anything from a preliminary approval to final construction permits.

The portfolio value when fully permitted, or the profit potential when developed, amounts to figures that are significantly higher that the current Asset Valuation which only reflects the portion of the planned buildable m2 that has final construction permits or zoning already and does not reflect any profits from development.

The Investment Manager updated estimates for the first phases of Dolphin's four Advanced Projects are that they should have a collective profitability potential in excess of €550 million or circa 77p per share. The execution of the first phases is expected to unlock significant further profits to be realised from developing and/or selling their further phases with little or no requirement for additional Dolphin equity.

Development update

Advanced Projects

1. The Porto Heli Collection ("PHC"), Greece

Progress since 2009 Annual Report:

Following the appointment of the general contractor in March 2010, the construction works at the Aman hotel, part of the first phase of the Porto Heli Collection, are progressing on schedule, with the completion of the Aman hotel expected by December 2011.

Two pavilions, which were inspected and approved by Aman Resorts and Ed Tuttle, the project's architect, are fully completed including furnishings. These pavilions are used as showcase for the 36 remainder pavilions that are currently under construction.

To date approximately 30 of the 38 pavilions have passed the concrete shell phase, with significant electromechanical and stone cladding works having been installed, while the common buildings are also being advanced, revealing the project's final architectural form. Latest pictures of the construction works at the Aman hotel may be viewed under:http://www.dolphinci.com/#construction-update.

The Aman Beach Club has also been designed and shall be submitted for permitting within Q2 2011 with a target of opening at the same time as the Aman hotel.

Final Environmental and Greek National Tourism Organisation Architectural Approval for 27 Aman Villas were granted on 20 July 2010 and 28 July 2010, respectively. Construction permits were issued for a further four Aman Villas on 1 December 2010, bringing the total number of villas with final building permits in place to eight out of 36 in total, while the construction of the first group of four Aman villas began in February 2011.

These construction permits include the three predefined Aman Villas linked to the Archimedia Holdings Ltd ("Archimedia") agreement executed on 20 September 2010 for the sale of a 14.29% stake in the Aman at Porto Heli for a consideration of €11 million. The agreement grants Archimedia the right to partially or wholly convert its shareholding stake into those three predefined villas and the issuance of the construction permits was a major condition to the transaction.

An amount of €7 million from an interim facility linked to the €33 million construction loan relating to the development of the Aman at Porto Heli has been drawn down. The 13-year term construction facility has a grace period on principal for the first three years, a margin of 550 basis points over the six-month Euribor and is secured with mortgages against the project land. The facility does not include any financial or performance covenants and, as such, its debt service will be initially guaranteed by Dolphin, a position that will be reviewed annually based on the progress in executing the business plan. Moreover, the Company has arranged a further €8 million three-year VAT facility to finance the temporary cash outflow for construction cost input VAT, which would be recoverable once the Aman hotel commences its operations.

The process for receiving Greek government subsidies for the Aman hotel, has significantly advanced and the final approval is imminent.

With respect to the Chedi Resort, the extension of the Chedi Hotel to include the Chedi Residences, was granted final Environmental Approval on 3 August 2010. As this is part of the second phase of PHC, applications for construction permits will follow on a later stage.

A Hotel Management Agreement was signed on 7 June 2010 with Nikki Beach (www.nikkibeach.com) to operate the Beach Hotel at PHC, a luxury lifestyle hotel and beach club intended for a younger clientele, which will comprise a mix of hotel suites and apartments. A new architectural concept has been prepared in conjunction with the Operator and the interior design of the project will be further adapted. Following this agreement, Dolphin's exclusivity in using the Nikki brand in Cyprus has been extended to Greece.

The process for receiving Greek government subsidies for the Nikki Beach Resort at Porto Heli has significantly advanced and the final approval is imminent. The Company is also in advanced discussions for a long-term construction debt facility.

The Seafront Villas sales programme was launched in 2010 along with its new website (www.theseafrontvillas.com). One of the ten available villas has been sold and transferred to its new owner and the infrastructure improvement works and final utilities connections for all the project villas are progressing.

2. Venus Rock Golf Resort, Cyprus

Progress since 2009 Annual Report:

Venus Rock Golf Resort obtained final planning permits for its two Tony Jacklin designed golf courses on 27 May 2010. This represents a major milestone for the project, as it creates an area zoned for an additional 711 single unit and 6 apartment building lots (a total of 200,000m2 buildable freehold residential space). With these additional permits, the first phases of the project are now fully zoned and have a total building capacity of 266,303m2, which brings the currently zoned capacity of the project to 445,534m2, not including the future potential of its 335 hectare land bank.

Infrastructure works at Venus Rock, which began on Q2 2010, are progressing on schedule and preparations are advancing for the commencement of the construction of the second golf course and the renovation of the existing one. The subcontractors for the works of the golf course have been appointed, and works are expected to commence in April 2011. A phasing plan has been developed so that 18 holes of the golf course remain open during the entire construction period.

The final designs for the issuance of the construction permit for the project's desalination plant, which is expected to have a production capacity of 15,000 tons of potable water per day, have been submitted and are under review. Once the desalination construction permit is issued, Venus Rock will proceed with obtaining the required authorisations for the delineation and separation of the project's 711 new golf lots, which will clear the way for the commencement of marketing and sales.

To date, €7.1 million has been drawn from the €50 million construction loan facility which has been obtained for the project. The 13-year term facility has a grace period on principal for the first three years, a margin of 550 basis points over the six-month Euribor and is secured with mortgages against the project land.

3. Playa Grande Club & Reserve, Dominican Republic (www.playagrande.com) 

Progress since 2009 Annual Report:

In Q3 2010, Dolphin has reached an agreement with Aman Resorts to consolidate the Aman and golf phases of the project by relocating the Aman hotel and villas into the golf course area to develop the first Aman golf-integrated resort in the world. In addition to creating a unique concept and differentiated product for the Caribbean market, this change has improved the potential profitability, financing and launch of the project by focusing sales on one phase, reducing infrastructure and construction costs through the consolidation of the leisure components in one location, and allowing Dolphin to benefit from the upside on the additional freed-up seafront area.

John Heah who is also the architect for the Aman at Kea was appointed to design the Resort at the new location. The masterplan and the concept architectural design for the key project components has already been designed and has been approved by Aman Resorts as of 3 March 2011.

The cost of fully developing the above mentioned phase is approximately US$50 million over a period of three years. As a first step to financing the development, Dolphin Capital Holdings Seven Ltd., the project's BVI holding company, issued US$40 million of Convertible Bonds with a 7% coupon payable semi-annually. The Bonds are guaranteed by DCI and can be converted into:

·; DCI shares at a price of US$0.7998 per share (50p using a US$1.5995 / GBP 1 fixed exchange rate); Or

·; Aman lots at conversion prices ranging between US$1.7 million to US$3 million per lot, which would constitute an estimated 40% discount to their retail sales values.

In order to minimise cash outflows during the development period, the Banco Leon $6 million loan has been restructured resulting to a combined $1.3 million cash outflow saving for 2011. As part of the restructuring, DCI has agreed to guarantee the interest payments of the loan.

With the Bonds in place, the project shall soon start the renovation of the golf course and finalise the designs and permits for the 30-room Aman hotel, Aman beach club and Aman villas. Renovation of the golf course by Rees Jones is expected to start in the summer of 2011 and construction of the Aman hotel in early 2012.

In addition to utilising Bonds proceeds, the funding of the project should be enhanced by additional debt from a syndicate of local banks and the launch of an initial round of Aman Founder Sales. To that end, a limited number of Aman villas will be released prior to the commencement of construction of the Aman hotel.

Construction of the model golf villa has advanced and completion is expected during Q2 2011.

Infrastructure plans and permitting for the adjacent Founders Phase on the Playa Grande beach are progressing and infrastructure construction is expected to commence in 2011 enabling the existing 30 lot owners to build their homes. This will benefit the whole project through captive demand generated by the presence of prominent New York based families at the heart of Playa Grande.

On March 16, 2011, Playa Grande was publicly recognized by the Ministry of Tourism of the Dominican Republic for its social responsibility and its compliance with legal and technical requirements (Certificate awarded to Playa Grande project by the Ministry of Tourism).

4. Pearl Island, Panama (www.pearlisland.com)

Progress since 2009 Annual Report:

Designing and permitting of the first ("Founders'") phase has been completed including major infrastructure works, the hotel lodge, lotting separation and initial designs for the first built residential units to be sold. The project has received "anteproyecto" permit for the development of the Founders' Phase. In addition to commencement of the development process, this permit allows the project to formally launch sales in accordance with the local legislation.

A range of infrastructure works have been completed on site including opening 26 kilometres of roads, setting up a drainage/erosion control system, installing water tanks and starting a plant and tree nursery alongside an agro-farm.

The Project pursued further initiatives for the preservation of the environment, the rescue of archaeological sites on the island and providing further support to the local community.

The Founders' phase, is planned to include the main facilities needed to establish the island as a destination - such as main infrastructure, beach club, recreation centre, 40-berth marina, private airstrip, and a limited number of Founder lots and villas for sale - and has an estimated aggregate upfront development cost of US$40 million. These development costs are planned to be funded through a combination of equity from Dolphin and its 40% joint venture partner, Grupo Eleta, Founder Lot pre-sales and local debt from regional banks. To that end, the project has already signed eight reservations for a total consideration of US$5 million out of the first 34 Founder lots released for sale and has agreed a term sheet for a US$15 million loan facility with a regional bank subject to the commensurate Founders' Sales being achieved.

Additional works, currently underway on the island, include the construction of the first phase of the airport runway, as well as the development of a showcase villa and part of the Founders' beach club, to establish the first facilities to host visitors on the island.

The project is also advancing joint venture discussions with reputable regional developers interested in constructing luxury hotels on the island which would establish it as a premium resort destination, add significant value to the remaining project land and further facilitate retail sales.

Major projects

We feel that following the EIS approval received by Triopetra on 24 November 2010, the project now also meets the requirements to be considered as a Major Project, bringing the total number of major projects to 14.

5. Sitia Bay Golf Resort, Sitia, Crete, Greece

Progress since 2009 Annual Report:

A construction Permit for the marina at the Sitia Bay Golf Resort was granted on 1 June 2010, allowing the development of a 32-berth marina alongside the already permitted Waldorf Astoria Hotel and the planned first phase of the residential development. The final agreements for the management and operation of the "Waldorf Astoria at Sitia Bay" were signed on 4 August 2010.

The permit application for the coastal residential area remains under review in the Ministry of Environment, while the application for a hilltop residential area was submitted on 11 March 2011. In addition documentation is being prepared to extend the hotel permit for an additional buildable of approximately 5,000m2 of Branded Villas.

6. Kea Resort, Tzia, Cyclades, Greece

Progress since 2009 Annual Report:

The project concept and schematic design has been signed off by Aman resorts, and the design teams are working on the final detailed design of the project, together with the local quantity surveyors to ensure that the project is designed within the project budget.

Kea Resort received approval of its PEIS on 28 December 2010, and approval of its yacht pier on 6 July 2010. GNTOS approval was also received on 21 March 2011. The EIS was submitted on 14 March 2011.

7. Scorpio Bay Resort, Scorponeri, Voiotia, Greece

Progress since 2009 Annual Report:

The PEIS for Scorpio Bay Resort has been reviewed by the relevant authority and its final approval is imminent, for the development of an 80-room Oberoi hotel and 25,800m2 residential real estate.

8. Lavender Bay Golf Resort, Nies, Magnesia, Greece

Progress since 2009 Annual Report:

The efforts to advance the permitting process continue, although no significant milestone was achieved within 2010.

9. Plaka Bay Resort, Sitia, Crete, Greece

Progress since 2009 Annual Report:

The efforts to advance the permitting process continue, although no significant milestone was achieved within 2010.

10. Triopetra, Crete, Greece

Progress since 2009 Annual Report:

Triopetra Resort received EIS approval on 24 November 2010. Triopetra is planned to include a 60-room luxury five-star hotel with restaurant, retail, spa & fitness, water-sports, outdoor activities and nature treks and approximately 8,870 residential buildable m2.

11. Eagle Pine Golf Resort, Cyprus

Progress since 2009 Annual Report:

All documentation for the issuance of the relevant golf and planning permit submitted to the authorities and the date for the announcement for the necessary Public Hearing is awaited.

12. Apollo Heights Polo Resort, Cyprus

Progress since 2009 Annual Report:

The efforts to advance the permitting process continue, although no significant milestone was achieved within 2010.

13. Livka Bay Resort, Solta, Croatia

Progress since 2009 Annual Report:

The location permits for the first phase of the development were approved on December 2010. This was a major milestone in the procedure to secure the final permit approval relating to the leisure and residential components of the first phase of the project.

The preparation of the documentation for the location permit application for the Marina has commenced and shall be submitted within Q3 2011.

14. Mediterra Resorts, Antalya, Turkey

Progress since 2009 Annual Report:

The construction permits for Mediterra Resorts (www.mediterraresorts.com) at Port Kundu in Turkey were extended for three more years on 8 April 2010 and 26 May 2010.

During 2010, seven villas were sold in LaVanta for an aggregate of €1.4 million Euros, five of which were delivered within the summer months. In addition a pool club was built which serves as a focal point of the project.

The Portfolio

A summary of Dolphin's current investments is presented below. As of 11 March 2011, the net invested amount is €735 million.

 *Including amounts paid in shares.

Exits

Aristo (www.aristodevelopers.com)

The measures that the Company took to protect Aristo against the effects of the slowdown in sales following the onset of the economic crisis proved effective, with Aristo meeting its target to be cashflow positive in 2010.

During 2010, Aristo made most of its sales from its vast stock of plots and fully or partially completed homes. The remaining stock currently comprises approximately 244 plots and 100 completed and 477 partially completed homes, with an estimated pre-discounted total sales value of approximately €240 million.

The sales growth momentum exhibited in 2010 was fragmented and does not currently provide assurances of short term recovery so Aristo is continuing with discount sales schemes to attract buyers. In 2011, Aristo aims to improve its sales network in its traditional markets of UK and Russia and continue its efforts to unlock new markets such as the Middle East, Scandinavia and China.

Aristo has also invested in preparing the launch of a small number of new projects in 2011 such as the Kings Avenue Mall.

Aristo's market leading position, vast stock and strong asset base are expected to enable the company to return to significant cashflow generating mode upon market recovery.

Sales performance

In 2010, Aristo generated €45 million of gross retail sales, which was 75% higher than 2009. This figure corresponds to 195 units (homes and lots), a 48% increase from 2009.

Kings Avenue Mall

Previously known as Athiari project, the Kings Avenue Mall is located in the heart of the Tourist Area of Paphos, and is envisioned to become the premier shopping mall of the town. It has a total of 24,400m2 of retail and entertainment areas and 1,150 parking spaces. One anchor tenant has already signed for 1,900m2. Discussions with major anchor tenants such as an international retailer for over 3,500m2, a multiplex for 2,250m2 and a multimedia store for 1,250m2 are in final stages. Additionally, floor plans have been agreed with franchisees of international food chains, completing almost the entire food courts floor allocation. While discussions with potential tenants for the smaller shops will only be initiated upon completion with all anchors, recorded demand has been very strong and required floor space is expected to considerably exceed availability. In terms of construction, consultants have been appointed for the execution of the technical studies and the commencement of the excavation works on the site will initiate shortly. Finally, financing negotiations are advancing with a major Cypriot bank to fully finance the construction of the mall. Aristo owns 50% of the project.

Market Dynamics

The most important observations for our industry are as follows:

·; Significant private equity capital is returning to the real estate market with a focus on luxury residential properties in core cities and beyond. According to DTZ Research, USUS$329 billion of capital is now evenly targeting the EMEA (35%), the Americas (34%) and Asia Pacific (32%).

·; Over the past three years, real estate investment capital has been competing for distressed transactions. As such transactions are being absorbed by the market, capital providers are beginning to allocate more capital to healthy assets and development opportunities.

·; The peripheral European countries (Greece, Spain, Portugal) are showing signs of stability, as systematic economic and financial meltdown was avoided, in part by the huge fiscal adjustment and EU/IMF backed rescue packages. Greece has been the main beneficiary, achieving substantial improvements on the repayment terms of the EU financial support package (reduced interest by 100 bps and extension of maturity by more than 3 years).

·; Emerging markets (China, Russia, India, Brazil) are demonstrating increased appetite for expensive European luxury goods spurred by freshly-created wealth. Analysts, estimate global luxury sales to have increased by an average of approximately 10% over 2010, indicating a revival in demand for luxury goods.

·; The tourism and hotel industry is forecast to increasingly attract demand from emerging markets like China and Russia. According to Market Probe of the Travel & Tourism Group, affluent Chinese luxury tourists are currently estimated at one million, and this is expected to grow significantly over the coming years. Dolphin's key markets are well positioned to capture some of that demand.

·; The number of international tourists is estimated to have reached a new all-time high in 2010, according to IPK and UNWTO. International arrivals are estimated to have increased by 6-7% to a new record of 935 million trips during 2010, according to the World Travel Monitor, representing a 2% increase on the previous record year of 2008, which demonstrates that international tourism has recovered from the 2009 slump and is already growing again in real terms in the first post-crisis year.

·; Tourist arrivals in all four Dolphin Mediterranean markets (Greece, Cyprus, Croatia and Turkey) totalled 62.1m for 2010 representing almost a 1 million increase over 2009, while tourism has contributed an augmented share of their respective GDPs ranging from 10% to 28%.

·; Panama has experienced remarkable GDP growth in recent years making it among the highest growth countries in the Americas, driven by the expansion of the Canal as well as the surge of foreign direct investment from North and South America. Average GDP growth was 6.8% between 2004 and 2010 and is forecast at 6.2% for 2011. Tourist arrivals in 2010 grew by 9.8% primarily due to increased demand from the United States and Europe.

·; The Dominican Republic has witnessed resilient economic growth in the past 5 years, being one of the fastest growing economies in the Caribbean region with an average GDP growth of 6.5%. Tourist arrivals increased by 3.3% during 2010 primarily due to further arrivals from the US and certain European markets such as Russia.

·; Given their high degree of dependence and correlation with the US economy, both Panama and the Dominican Republic are expected to experience positive spill over effects from a healthy US economy recovery.

Strategic Focus

The strategic priorities of the Company for 2011 and beyond are the following:

1. Advance and complete the construction of the first phases of Dolphin's four Advanced Projects: the Porto Heli Collection, Venus Rock Golf Resort, Playa Grande Club and Reserve and Pearl Island. The first phases of these projects, which include the completion of their first hotels, golf courses or other leisure facilities, as well as their main infrastructure, will establish them as luxury resort destinations and act as a catalyst for both retail home sales and project joint ventures or exits. The development of the key components of the first phases is estimated to be completed within the next one to two years, in time for an expected significant market recovery after a prolonged slowdown.

2. Invest in the production of effective marketing material (including brochures, 3D renderings and films, websites, online campaigns) and the setup of the appropriate luxury media and sales channels in key international and regional markets to realise high-end retail sales and attract investment partners.

3. Complete the zoning and permitting of Dolphin's Major Projects to upgrade them to Advanced Project status. This shall enable Dolphin to either exit those projects at a significant return multiple to cost or to develop them and capture their full cash return potential.

4. Expand the retail and land sales of Aristo by increasing the Company's market share in existing and new markets. The short to medium term objective is for the Company to start generating cash profits again, reduce leverage and provide dividends to Dolphin.

5. Realise project joint ventures and exits to increase the liquidity of the Company and further demonstrate the true value of the real estate portfolio.

6. Subject to having the appropriate cash liquidity from project exits, opportunistically acquire back DCI shares or other key resort land assets in strategic emerging markets in the Mediterranean, Caribbean and Latin America, in order to solidify Dolphin's position as the leading investor and developer in the sector.

Corporate Social Responsibility

Corporate Social Responsibility is a cornerstone of Dolphin's culture. As such, Dolphin and its Investment Manager consider it their responsibility to respectfully co-exist with and support the societies and environments where we invest.

Since the developments in which we are involved touch the lives and environments of many people, we always strive to be open in our business approach and continuously welcome interaction with all of our stakeholders and the local communities where we are active.

Our aim is to provide excellent returns to our shareholders, while in parallel contributing in meaningful ways to local economies, societies and environments, with the aim of bringing long lasting prosperity to the regions where we invest.

Dolphin Capital Foundation

Dolphin Capital Foundation ("DCF") is a non-profit charitable entity set up on 12 December 2007, dedicated to helping the surrounding regional communities and the natural environments where Dolphin invests by donating to various charitable endeavours.

To date, DCF has already made key contributions such as environmental equipment provision, sponsorships, scholarships and other educational and health support to the local communities. Further progress in charitable activities is planned over the coming months as Dolphin seeks to balance shareholder returns with corporate social responsibility.

More specifically, DCF funds were used to:

·; Provide environmental maintenance equipment to the areas of The Porto Heli Collection, Sitia Bay and Lavender Bay

·; Provide scholarships to local students with exceptional academic performance

·; Finance an awareness campaign on environmental issues (such as initiatives to protect the sea turtles in the Mediterranean)

·; Finance research activities of the Harvard School of Public Health in Cyprus

·; Renovate a church destroyed by earthquakes

·; Provide IT equipment to local schools

·; Finance initiatives for less privileged children in Greece and Cyprus

·; Provide emergency relief to the wider areas of Lavender Bay and Playa Grande which suffered from floods, earthquakes and other calamities.

 Finance Director's Report

Net Asset Value ('NAV')

Consistent with the Company's valuation policy, Colliers International ("Colliers") performed a valuation of the entire portfolio as at 31 December 2010. Specifically, the following factors contributed to a decrease in NAV compared to the previous year:

·; a 1.4% net decrease in the overall portfolio valuation (revaluation gains in Venus Rock Golf resort, Lavender Bay, Seascape Hills, Livka Bay, Rebranded Hotel driven by the receipt of permits was counterbalanced by reductions in Aristo and other asset valuations reflecting market conditions)

·; Regular fixed Dolphin operational, corporate and management expenses.

The fall in NAV was partly offset by the appreciation of the Americas properties in Euro terms due to devaluation of the dollar against the Euro.

Sterling NAV per share decreased by 10.4% driven in addition to the reasons mentioned above, by the 4.8% appreciation of the Sterling versus the Euro.

The reported NAV as at 31 December 2010 is presented below:

Notes:

1. GBP/Euro rate 0.85656 as at 31 December 2010.

2. NAV per share has been calculated on the basis of 627,402,547 issued shares (excluding 306,681 treasury shares obtained in 2009 from the Shares-for-Assets programme) as at 31 December 2010.

Consistent with prior years, NAV figures do not take into account the potential payment of the Investment Manager's performance fee calculated as 20% of the net realised cash profits from each project only after achieving a hurdle of 8% annual compounded return. Based on the 31 December 2010 NAV, the performance fee that would be payable (assuming that the whole portfolio was sold at NAV after DITL) was approximately €70 million.

Finally, the reported DITL of €120 million were calculated based on the current fair market value of the land acquired as reported by Colliers, and are applicable only in the event of a direct sale of land or assets. The sale of land is anticipated to take effect through the sale of shares of the holding SPVs and, as such, most of the DITL are not expected to materialize or become payable. The NAV before DITL is therefore considered by Investment Manager as the more representative figure.

A solid financial position

The Company's NAV before DITL, after deducting from total consolidated assets, non-controlling interests of €41 million, other liabilities of €88 million and total debt of €397 million is set at €1,264 million as at 31 December 2010.

The reduction in the NAV after DITL resulted to an accounting loss of €73 million for the year ended 31 December 2010 implying a loss per share of €0.12.

The consolidated financial statements have been audited by KPMG.

The Company's consolidated assets total €1.79 billion and include €1.72 billion of real estate assets and €44 million of other assets. The €1.72 billion figure represents Colliers' fair market valuation of Dolphin's entire real estate portfolio (both freehold and leasehold interests) as at 31 December 2010, assuming 100% ownership. The €44 million of other assets comprise mainly €22 million of Aristo trade receivables, €8.5 million of VAT receivable and €3 million of deferred tax asset.

The Company's consolidated liabilities total €605 million and include €120 million of DITL, €88 million of other liabilities as well as €397 million of interest-bearing loans and finance lease obligations all of which are held by Group subsidiaries and are non-recourse to Dolphin (except for the debt servicing of the Aman at Porto Heli construction facility and the interest servicing of Banco Leon loan at Playa Grande). Of the total Group debt of €387 million, 89% is accounted by Aristo. The total expected debt service obligations of Aristo for 2011 are estimated at €19 million and are expected to be covered by Aristo's operational cash flow.

The €88 million of other payables comprise mainly €20 million of advances from customers relating to contractual construction works in progress by Aristo and €27 million of deferred land payments, €21 million of which should materialise in 2013.

Aristo pro forma financials

Aristo's proforma consolidated statement of comprehensive income (adjusted to exclude gains/losses from revaluation and negative goodwill from acquisitions) for the year ended 31 December 2010 and 31 December 2009 is as follows:

In terms of accounting results, excluding asset revaluations, Aristo reported an operating after tax loss of €11.8 million versus a profit of €1.4 million in 2009. Operating results for the year ended 31 December 2010 have been affected by the significant drop in sales in 2009 which resulted in a decrease in units delivered in 2010.

Panos Katsavos

Finance Director

Dolphin Capital Partners

22 March 2011

Consolidated statement of comprehensive income

For the year ended 31 December 2010

Consolidated statement of financial position

As at 31 December 2010

Consolidated statement of changes in equity

For the year ended 31 December 2010

Consolidated statement of cash flows

For the year ended 31 December 2010

Notes to the consolidated financial statements

1. General information

Dolphin Capital Investors Limited (the 'Company') was incorporated and registered in the British Virgin Islands on 7 June 2005. The Company is a real estate investment company focused on the early-stage, large-scale leisure-integrated residential resorts in south-east Europe, and managed by Dolphin Capital Partners Limited (the 'Investment Manager'), an independent private equity management firm that specialises in real estate investments, primarily in south-east Europe. The shares of the Company were admitted to trading on the AIM market of the London Stock Exchange ('AIM') on 8 December 2005.

The consolidated financial statements of the Company as at 31 December 2010 comprise the financial statements of the Company and its subsidiaries (together referred to as the 'Group') and the Group's interests in associates and jointly controlled entities.

The consolidated financial statements of the Group as at and for the year ended 31 December 2010 are available at www.dolphinci.com.

2. basis of preparation

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU').

The consolidated financial statements were authorised for issue by the Board of Directors on 21 March 2011.

b. Basis of measurement

The consolidated financial statements have been prepared under the historical cost convention, with the exception of property (trading properties, only on a business combination) and investments at fair value through profit or loss, which are stated at their fair values and investments in associates and jointly controlled entities, which are accounted for in accordance with the equity method of accounting.

c. Application of new and revised Standards and Interpretations

As from 1 January 2010, the Company adopted all of the IFRS and International Accounting Standards ('IAS'), which are relevant to its operations. The adoption of these Standards did not have a significant effect on the financial statements of the Company, except for the adoption of IFRS3 "Business Combinations". Under the provisions of the revised IFRS 3, entities have a choice to measure non-controlling interest in the acquiree either at its fair value or at its proportionate interest in the acquiree's net assets. In addition, contingent consideration is measured at fair value at the date of acquisition with subsequent changes in the fair value being recognised in profit or loss. Also, acquisition-related costs are expensed through profit or loss at the time the services are received. The Group has applied the revised IFRS 3 in its financial statements prospectively.

The following Standards, Amendments to Standards and Interpretations had been issued but are not yet effective for the year ended 31 December 2010:

(i) Standards and Interpretations adopted by the EU

·; Improvements to IFRS issued in May 2010 (Effective for annual periods beginning on or after 1 July 2010 and 1 January 2010 as applicable).

·; IFRS1 (amendment): Limited exemption from comparative IFRS7 disclosures for first time adopters (effective for annual periods beginning on or after 1 July 2010)

·; IAS 24 ''Related Party Disclosures'' (revised)(effective for annual periods beginning on or after 1 January 2011).

·; IAS 32 ''Classification of rights issues'' (amendments) (effective for annual periods beginning on or after 1 February 2010).

·; IFRIC 14 Prepayments of a Minimum Funding Requirement (amendments) (effective for annual periods beginning on or after 1 January 2011).

·; IFRIC 19: ''Extinguishing Financial Liabilities with Equity Instruments'' (effective for annual periods beginning on or after 1 July 2010).

(ii) Standards and Interpretations not adopted by the EU

·; IFRS 1 - Severe Hyperinflation and Removal of Fixed Dates for First-Time Adopters (amendments) (effective for annual periods beginning on or after 1 July 2011).

·; IFRS 7 Financial Instruments (amendments): Disclosures - Transfers of Financial Assets (effective for annual periods beginning on or after 1 July 2011).

·; IFRS 9 ''Financial Instruments'' (effective for annual periods beginning on or after 1 January 2013).

·; IAS 12 - ''Deferred tax: Recovery of Underlying Assets'' (amendments)(effective for annual periods beginning on or after 1 January 2012).

The Board of Directors expects that the adoption of the above financial reporting standards in future periods will not have a significant effect on the financial statements of the Company.

d. Use of estimates and judgments

The preparation of consolidated financial statements in accordance with IFRS requires from Management the exercise of judgement, to make estimates and assumptions that influence the application of accounting principles and the related amounts of assets and liabilities, income and expenses. The estimates and underlying assumptions are based on historical experience and various other factors that are deemed to be reasonable based on knowledge available at that time. Actual results may deviate from such estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements are described below:

·; Work in progress

Work in progress is stated at cost plus any attributable profit less any foreseeable losses and less amounts received or receivable as progress payments. The cost of work in progress includes materials, labour and direct expenses plus attributable overheads based on a normal level of activity. The Group uses its judgement to select a variety of methods and make assumptions that are mainly based on market conditions existing at each statement of financial position date.

·; Revenue recognition

The Group applies the provisions of IAS18 for accounting for revenue from sale of developed property, under which income and cost of sales are recognised upon delivery and when substantially all risks have been transferred to the buyer.

·; Provision for bad and doubtful debts

The Group reviews its trade and other receivables for evidence of their recoverability. Such evidence includes the customer's payment record and the customer's overall financial position. If indications of irrecoverability exist, the recoverable amount is estimated and a respective provision for bad and doubtful debts is made. The amount of the provision is charged through the consolidated statement of comprehensive income. The review of credit risk is continuous and the methodology and assumptions used for estimating the provision are reviewed regularly and adjusted accordingly.

·; Income taxes

Significant judgement is required in determining the provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

·; Fair value of property

An external, independent valuation company, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued, values the Group's investment property every six months. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had each acted knowledgeably and willingly.

·; Impairment of intangible assets

Intangible assets are initially recorded at acquisition cost and are amortised on a straight-line basis over their useful economic life. Intangible assets that are acquired through a business combination are initially recorded at fair value at the date of acquisition. Intangible assets with indefinite useful life are reviewed for impairment at least once per year. The impairment test is performed using the discounted cash flows expected to be generated through the use of the intangible assets, using a discount rate that reflects the current market estimations and the risks associated with the asset. When it is impractical to estimate the recoverable amount of an asset, the Group estimates the recoverable amount of the cash generating unit in which the asset belongs to.

·; Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units of the Group on which the goodwill has been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating units using a suitable discount rate in order to calculate present value.

e. Functional and presentation currency

The consolidated financial statements are presented in euro (€), which is the functional currency of the Group, rounded to the nearest thousand.

3. Determination of fair values

A number of the Group's accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Property, plant and equipment

The fair value of land and buildings classified as property, plant and equipment is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had each acted knowledgeably and willingly. The market value of land and buildings classified as property, plant and equipment is based on the appraisal reports provided by independent property valuers.

Investment property

The fair value of property is determined by using valuation techniques. The Directors have appointed Colliers International, an internationally recognised firm of surveyors to conduct valuations of the Group's acquired properties to determine their fair market value. These valuations are prepared in accordance with generally accepted appraisal standards, as set out by the American Society of Appraisers (the 'ASA'), and in conformity with the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation and the Principles of Appraisal Practice and Code of Ethics of the ASA and the Royal Institute of Chartered Surveyors ('RICS'). Furthermore, the valuations are conducted on an 'as is condition' and on an open market comparative basis. Property valuations are prepared at the end of June and December of each year. Where necessary, the Group undertakes quarterly valuations on selected projects.

The valuation analysis of properties is based on all the pertinent market factors that relate both to the real estate market and, more specifically, to the subject properties. The valuation analysis of a property typically uses four approaches: the cost approach, the direct sales comparison approach, the income approach and the residual value approach. The cost approach measures value by estimating the Replacement Cost New or the Reproduction Cost New of property and then determining the deductions for accrued depreciation that should be made to reflect the age, condition and situation of the asset during its past and proposed future economic working life. The direct sales comparison approach is based on the premise that persons in the marketplace buy by comparison. It involves acquiring market sales/offerings data on properties similar to the subject property. The prices of the comparables are then adjusted for any dissimilar characteristics as compared to the subject's characteristics. Once the sales prices are adjusted, they can be reconciled to estimate the market value for the subject property. Based on the income approach, an estimate is made of prospective economic benefits of ownership. These amounts are discounted and/or capitalised at appropriate rates of return in order to provide an indication of value. The residual value approach is used for the valuation of the land and depends on two basic factors: the location and the total value of the buildings developed on a site. Under this approach, the residual value of the land is calculated by subtracting from the estimated sales value of the completed development, the development cost.

Each of the above-mentioned techniques results in a separate valuation indication for the subject property. Then a reconciliation process is performed to weigh the merits and limiting conditions of each approach. Once this is accomplished, a value conclusion is reached by placing primary weight on the technique, or techniques, that are considered to be the most reliable, given all factors.

Trading properties

The fair value of trading properties acquired in a business combination is determined based on their estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the trading properties.

Financial assets at fair value through profit or loss

The fair value of financial assets at fair value through profit or loss is determined by reference to their quoted bid price at the reporting date. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same and discounted cash flow analysis, making maximum use of market inputs and relying as little as possible on entity specific inputs. Equity investments for which fair values cannot be measured reliably are recognised at cost less impairment.

Trade and other receivables

The fair value of trade and other receivables, excluding construction work in process, is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date.

Non-derivative financial liabilities

Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance leases, the market rate of interest is determined by reference to similar lease agreements.

4. Significant company holdings

As at 31 December 2010, the Group's most significant company holdings were the following: