Madinaty Master Plan - Talaat Moustafa Group

and semi-annual financial statements on an unconsolidated basis prepared in accordance with EAS, to providenotices of any material developments to the CMA and to the CASE, to provide the CASE with minutes of itsordinary and extraordinary general meetings and to publish its annual and half yearly financial statements in localnewspapers. However, these requirements generally result in less information being made publicly available than isregularly published by or about listed companies in the United States, the United Kingdom or certain othercountries. In addition, regulations concerning reporting requirements for Egyptian companies may not afford thesame degree of investor protection as is available in other countries. Although Egyptian law imposes blackoutperiods, restrictions and penalties on insider trading and price manipulation, the Egyptian securities markets are notas highly regulated and supervised as more established securities markets, such as the securities markets in theUnited States, the United Kingdom or certain other countries.The rights of investors as shareholders will be affected by the laws of Egypt and investors may havedifficulty effecting service of process on TMG or enforcing judgments obtained outside Egypt.TMG is an Egyptian company and its corporate affairs and the rights of shareholders will be governed by Egyptiancompany law and its statutes. The rights of its shareholders and the responsibilities of members of its board ofdirectors under Egyptian law are different from, and may be subject to certain requirements not generally applicableto, corporations organized in the United States, the United Kingdom and other countries. For a further description ofshareholder rights under its statutes and Egyptian law, see “Description of Share Capital and Applicable EgyptianLaw”.In addition, most of TMG’s directors and executive officers are residents of Egypt and a substantial portion of TMG’sassets are located in Egypt. As a result, it may not be possible for investors to effect service of process outside of Egyptupon TMG or for such persons to enforce judgments against TMG and its directors and officers, predicated on the civilliability provisions of the U.S. federal securities laws or otherwise, obtained outside Egypt, without a re-examinationof the merits, unless certain conditions are met. For a brief description of these conditions, see “Enforcement ofArbitral Decisions and Civil Liabilities”.A public market for TMG’s Shares may not develop and the market price for its Shares may be volatile.Prior to the Combined Offering, there has been no active public trading market for the Shares, and TMG can provideno assurance that an active trading market for the Shares on the CASE will develop or be sustained after theCombined Offering. Furthermore, the Offer Price was determined by negotiations between the Lead Managers andTMG and may not be indicative of prices that will prevail in the later trading market. Therefore, investors may notbe able to resell their Shares at or above the Offer Price.The Egyptian securities market in general, and the CASE in particular, is substantially less liquid and more volatilethan established markets such as those in the United States, Western Europe and in other countries and regions withhighly developed securities markets. For the period between 1 January 2007 and 30 September 2007 the CASE hadan average daily trading volume of approximately 41.3 million shares, with a value of US$189.9 million. The tenlargest companies in terms of market capitalization represented approximately 49.7 per cent. of the CASE’saggregate market capitalisation. The relatively small market capitalisation and low liquidity of the CASE mayimpair the ability of shareholders to sell the Shares on the CASE, which could increase the volatility of the price ofthe Shares.Although the CASE has a book-entry system for trading dematerialized shares, settlement procedures in Egyptremain relatively less developed and less reliable than those in more established securities markets. Accordingly,while the settlement period for trades affected on the CASE is up to three business days, settlement delays andadministrative problems may occur.Shareholders may not receive cash dividends in respect of their Shares.The Company has not committed to pay annual dividends and its actual dividends may vary depending on theCompany’s gross profit and management’s analysis of the Group’s growth, expansion plans and capital needs.According to the Egyptian Companies Law, the Company may not be able to distribute dividends if suchdistribution would affect its ability to fulfil its future monetary obligations on their due dates. In addition, anydistribution of dividends must be approved at an ordinary general meeting of shareholders by a majority of votespresent or represented at the meeting. See “Dividend Policy”.Sales of substantial numbers of TMG’s Shares in the public markets following the Combined Offering couldhave an adverse effect on the market for, and the prices of, the Shares.The Company and certain other shareholders, who together own 75.7 per cent. of the Shares, have agreed that,without the prior written consent of the Lead Managers, it and they will not issue, offer, pledge, sell, contract to sellor otherwise dispose of any shares or securities convertible into shares for a period of six months from the Closing23