IIG Prospectus - London Stock Exchange

The performance of IIG’s investments in associated companies and their ability to generatedividends and/or profits is subject to a range of risks, the most important of which are describedunder ‘‘Changes in the general economic, political and market conditions in the Gulf Co-operationCouncil (GCC) and wider Middle East region may adversely impact IIG and its associated companies’’and ‘‘The businesses in which IIG invests are subject to particular risks’’ below.IIG’s continued development may be constrained by operational factorsIIG has experienced significant growth in recent years by investing in new business areas anddeveloping the businesses it has invested in. As a result, the responsibilities of management havesignificantly increased and greater demands are being placed on IIG’s internal control systems. AsIIG continues to expand its business and the businesses in which it invests, IIG will need to:* identify and recruit further personnel to expand the management teams of thebusinesses in which it has invested to cope with current and anticipated growth;* develop and enhance its internal control systems and information technology systemsand those of the businesses in which it invests;* integrate the business culture and adoption of best policies and practices throughout itsbusiness areas; and* increase its marketing activities, particularly in relation to its consumer focussedbusinesses.There can be no assurance that IIG will be successful in any or all of these respects and anyfailure to satisfy these needs could have a material adverse effect on IIG’s business, results ofoperations and financial condition.IIG may lose the ability to significantly influence one or more of its associated companiesIIG’s business strategy assumes that it will retain significant influence over, but not control of,the operations of the companies in which it invests. IIG generally seeks to hold an investment ofbetween 20 and 50 per cent. in those companies with the precise size of the investment beingdetermined on a case by case basis. It is possible therefore that should certain events occur,including unsolicited bids by third parties, IIG may lose its ability to significantly influence thestrategy and business development of one or more associated companies and this could have amaterial adverse effect on IIG’s business, results of operations and financial condition.FinancingIIG has made, and expects to continue to make, significant investments in acquiring newbusinesses and in financing the activities of certain of the existing businesses in which it hasinvested. These investments are expected to be financed through a combination of internallygenerated cash flow and external fund raising. No assurance can be given that IIG will be successfulin raising funds from third parties on terms that are acceptable to it or at all. If IIG is unable atany time to raise financing on acceptable terms, it may not be able to pursue investmentopportunities and its business may be adversely affected as a result.Any loss of senior management may adversely affect IIGIIG’s senior management has been instrumental in defining and implementing its strategy andgrowing its business. The continued service of this management team is important to IIG’s overallmanagement as well as its culture and strategic direction. None of the members of IIG’s seniormanagement have fixed term contracts and accordingly any or all of them could leave at any timeand could, upon leaving IIG, establish or join a competing business. The loss of one or moremembers of IIG’s senior management could therefore have a material adverse effect on IIG’sbusiness, results of operations and financial condition.The businesses in which IIG invests are subject to particular risksIIG currently has significant investments in five separate businesses and also carries on anasset management business (which it intends to transfer to an associated company during 2007).Each of these businesses is exposed to particular risks inherent in its sphere of operations as wellas to many of the risks that also apply to IIG. In particular:* Grand: As a company engaged in the real estate development and management industry,Grand faces a number of risks associated with that industry including, but not limited to,the risk that demand for its properties under development may be adversely affected bychanges in political, social or economic conditions, a range of construction risks in20