1st July 2014 to 31st December 2014

Dilmunia Development Fund I L.P.Enhancing Life, Restoring Balance

2. Dilmunia Fund Report. 1st July 2014 to 31st December 2014

Contents•  Dilmunia Key Developments

•  Project Development

•  Key Targets

•  Appendix

The Fund Manager, Ithmaar Bank B.S.C. is pleased to release the nineteenth Dilmunia Development Fund I L.P. (the “Fund”) Investor Report, on behalf of Ithmaar-Dilmunia General Partner Company limited, for the period ending 31st December 2014.

3. Dilmunia Fund Report. 1st July 2014 to 31st December 2014

Dear Investor,

Welcome to the 19th edition of the Dilmunia Development Fund I L.P. Investors’ Report, covering the period from 1 July 2014 to 31 December 2014. On behalf of Ithmaar-Dilmunia General Partner Company Limited, we are happy to update you on the key developments in the ongoing construction of Dilmunia’s infrastructure, as well as the progress of various projects at Dilmunia. 

Dilmunia’s electrical power infrastructure development has taken important steps towards becoming a major addition to the national power grid with the signing of a Memorandum of Understanding (“MoU”) with the Electricity and Water Authority (“EWA”) in August 2014. This paved the way for the taking-over of Dilmunia’s 11KV substation by EWA. In addition, the 66KV primary substation was delivered and placed on site in December 2014, while civil works by Cebarco S.P.C. (“Cebarco”) on this important part of the infrastructure were also completed in December 2014.

The Ministry of Municipalities and Urban Planning has confirmed in December 2014 the approval of the subdivision plan of Dilmunia and informed of its imminent insertion into the national plan, marking a major milestone for the development. Discussions with interested investors also continued during the reporting period, with the signing of a new sale agreement with a Bahraini developer concerning four plots, covering an area of approximately 11,000 sqm.

We expect these developments, and others detailed in this report, to bear fruit in the coming year. We look forward to updating you with further progress on this landmark project in 2015.

Best regards,

Fund Manager, Ithmaar Bank B.S.C. (“Ithmaar”)

4. Dilmunia Fund Report. 1st July 2014 to 31st December 2014

Dilmunia Key Developments

Master Plan:

•  A letter was received from the Ministry of Municipalities Affairs and Urban Planning (“MAUP”) confirming the approval of subdivisions within Dilmunia’s master plan. The document follows lengthy discussions with the Urban Planning Authority during Q4 2014. This will pave the way for the subdivision and the cadastral plan issuance.

•  The final master plan was submitted for approval and inspection by the MAUP. Following the progress on the matter, the subdivision master plan is expected to be issued by the MAUP (shafaf) during 2015. 

Infrastructure Design:

•  Dilmunia officially became a part of the Kingdom of Bahrain’s national power grid and water network in November 2014 with the signing of a Memorandum of Understanding (“MoU”) between Ithmaar Development Company (“IDC”) and the Electricity and Water Authority (“EWA”) in August 2014. The MoU opens the door for the official handover of Dilmunia’s power and water infrastructure to the concerned authorities, and speeds up approvals of various projects and processes.

•  Detailed designs for the Temara development’s roads, streetlighting, and storm water drainages were completed by Mott McDonald Limited (“MML”) in Q3 2014. Progress was also made in preparing detailed designs for roads and utilities serving the Southern Residential Development (“SRD”). 

•  Final landscaping designs for the road network have progressed in Q4 2014, with the issuance of the updated designs due in Q1 2015.

•  A Request for Proposal (“RFP”) for the design of the Dilmunia Gateway Bridge was prepared and issued in October 2014.

Nine international companies were invited. Proposals received during October and November 2014 are currently under review. 

Infrastructure Progress:

•  Major works on the Distributor Road Bridge, including structural and civil works and the construction of the crash barrier, were completed by Cebarco S.P.C. (“Cebarco”) during this period.

 •  The sewer network came closer to completion with all major works finalised, including the excavation of sewer trenches and manholes construction. The majority of the manholes falling within the Phase 1 scope of works have also been completed. 

•  During the period, the Phase I potable water network was completed and finalized.

Primary Electrical Substation:

•  Fuji Electric Co., Ltd. (“FE”) received a partial handover of the 66KV substation from Cebarco in November 2014, enabling the placing of the electrical transformers. Shipments of substation equipment arrived in the same month and were placed on site in December 2014. FE’s work on the substation is expected to be complete by Q1 2015, with full energisation to be achieved by Q2 2015. This substation will provide energy to roughly 40% of the entire development. Dilmunia’s Master Plan also calls for the construction of two additional primary electrical substations at a later stage.

•  Cebarco made major progress in the substation’s civil works, with plot excavation and building foundation works having started in July 2014. Civil works were completed, with finishing works to be done in Q1 2015.

Pressure testing a sewer rising main at the Distributor Road

Temporary sleeve pipes for dewateringCivil Works complete for the Distributor Road Bridge

Pressure testing for the irrigation network

• SaleandpurchaseagreementwithCooperationInvestmentHouseforaresidentialprojectcontaining300apartmentsonalandsizeof11,604.39sqm.

• ApprovalofDilmuniaMasterPlansubdivisionbytheMinistryofMunicipalitiesAffairsandUrbanPlanning.

• MemorandumofUnderstandingwiththeElectricityandWaterAuthority.

• MajorworkscompletionfortheDistributorRoadBridge.

• Executionofadditionalin-kindredemptionsforcurrentLimitedPartners.

Located on the northwestern waterfront of the Island, with views overlooking the Muharraq coastline, SeaVilla, a Health Island B.S.C. (c) project, consists of single-plot individual villas in a range of styles constructed with a low building density, and integrated into a private area with a 500m shoreline. The SeaVilla construction contract was awarded to Bahrain-based Mohammed Jalal Contracting Co. W.L.L. (“MJC”) in December 2013.

Launched in August 2013, Temara is a low density development of 22 sea facing and 15 coastal plots. It offers a range of plot sizes, from 596 sqm to 1,488 sqm. All plots are sized in depth and length, with a minimum 15m width and upwards of 40m in length, to accommodate both a large villa with a spacious garden, and a large car park in front. The neighborhood will be accessible by two roads, with a road end roundabout allowing free flowing traffic in and out. 

5. Dilmunia Fund Report. 1st July 2014 to 31st December 2014

SalesandMarketing:

To date, land totaling 103,957 sqm has been sold in Dilmunia, including 26,167 sqm sold through in-kind redemption sales. The sold plots are of mixed use and residential classification, and are situated in various locations across the island. Overall, these sales represent 21.4% of the total Fund land area in Dilmunia.

Temara

•  Cebarco completed earthworks filling of the Temara road up to formation level during October 2014, enabling utility network construction to take place. 

•  MML completed the detailed design of the internal roads and utilities serving Temara. 

•  During the reporting period, plot purchasers continuously submitted individual villa designs for approval. 

SeaVillaDevelopmentProject

•  SeaVilla construction is progressing well, with work on the villa structures nearing completion. Construction is on track towards meeting all deadlines.

TechnicalInterfaceOffice

•  The final draft of a Technical Interface Agreement (“TIA”) was received by IDC during September 2014 following discussions with the Ministry of Works’s Central Planning Office, and is currently under review. Once signed, the agreement will pave the way for the opening of a Technical Interface Office (“TIO”) to manage and speed up approvals processes related to Dilmunia’s various developments.

Temara sewer network construction Installation of the sewer manhole at Temara

6. Dilmunia Fund Report. 1st July 2014 to 31st December 2014

Business Development

Project  Development

•  A sale and purchase agreement was signed with Cooperation Investment House for four residential plots in Dilmunia in August 2014, with meetings taking place to review conceptual designs. The concept design was for the “Essence of Dilmunia” project which consists of 300 modern apartments of one, two and three bedroom units.

•  During the period, two Limited Partners executed their right to in-kind redemptions, where one of them fully redeemed his partnership interests in exchange for property in Dilmunia.

•  A Bahraini development company, interested in three plots, initiated preliminary designs, and costing for feasibility study purposes. Designs have been submitted for approval to IDC. 

CurrentProjectsDevelopment:

•  A sale agreement was signed with Bin Faqeeh in May 2014 to develop residential units. Piling works started on site for Bin Faqeeh Real Estate Investment Company’s BD45 million ‘The Treasures’ project in August 2014, and progressed through Q4 2014. The Treasure will be a high quality residential apartments development that will fit perfectly within Dilmunia’s healthy living environment. 

 •  In order to keep the consistency of the canal plots’ design in Dilmunia, a number of international firms were approached to create a concept for the plots. Out of

•  Dusit’s Hotel Management Agreement (“HMA”) has been finalised and can proceed to execution when the right investor is identified.

•  Still in its early stages, South Residential Development (“SRD”) is available to investors, either to be purchased outright and developed according to a pre-approved plan, or to be jointly developed with Dilmunia. MML completed detailed designs of the internal roads and utilities serving SRD area, opening the door for works to start as soon as suitable investors are found.

•  Details on plots in Dilmunia and offers were provided to new interested investors during the reporting period.

seven submissions received in June 2014 in response to an RFP for preliminary designs for plots in the Canal District Dilmunia (“CDD”), two companies were selected for further negotiations before appointment.

•  In November 2014, a previously selected shopping mall developer submitted for approval the final concept design for Dilmunia’s main shopping complex, with follow-up meetings on utilities and traffic held during this period. Site investigations are ongoing.

Key TargetsDevelopment:

•  Finalisation of TIA 

•  Follow up with all the different sub-developers (a continuous task)

Infrastructure:

•  Substation 1 civil works to be completed by Q1 2015, with full energisation of the 66KV substation by the end of Q2 2015

•  Following up on progress of Phase I infrastructure works (continuous task)

•  Initiation of infrastructure Phase II during 2015

Marketing:

•  Continuous update of the Dilmunia website

•  Participation in local and regional real estate exhibitions

•  Seeking of future business opportunities in Dilmunia through tie-ups with prominent real estate developers

Source: 31 December 2014 Management Accounts.

7. Dilmunia Fund Report. 1st July 2014 to 31st December 2014

Appendix

There was no Board remuneration paid during 1 July 2014 to 31 December 2014.

•  Summary of Board resolutions during  1 July 2014 to 31 December 2014:

a)  Approving the 2013 price list for the In-kind Redemption Prices. 

b)  Appointing Standard Chartered Bank – Tokyo for the purpose of confirming a letter of credit to Fuji Electric for the primary electrical substation.

c)  Authorizing IDC to apply for a letter of credit as a form of payment for the primary electrical substation on behalf of the General Partner. 

Central Bank of Bahrain Disclosure Requirements:

•  Bankers:Ithmaar Bank B.S.C. 

•  Management Fees: The Fund Manager has suspended its Management Fees since October 2010.

•  Placement Fees: The Placement Fee was 3% of the respective Commitment. 

NAV\Unit Equity Assets Comprehensive Income(Loss)

9,232 160,822,169 165,312,299 (454,400)

All amounts in USD 

UtilisationofProceeds

•  Fund Net Asset Value (“NAV”) as on 30 December 2014*:

Category Amount(USD) Percentage(%)

Infrastructure Costs  8,179,027.79  98.28%Expense  143,390.82  1.72%Total 8,322,418.61 100%

BankAccounts Bank Amount(USD)heldbyDilmunia

Current Account   Ithmaar Bank B.S.C.  4,473,286as at 31 December 2014 Modaraba Account  Ithmaar Bank B.S.C.  5,814,365as at 31 December 2014

•  Recipients of Material Amounts (above 10%)

•  Amount Spent during the period

•  Current Board Members

•  Utilisation of Proceeds comparison with PPM

Supplier Amount(USD) %ofTotalSpent duringtheperiod

Cebarco Bahrain SPC  3,138,798.37  37.72%Mott MacDonald Limited  1,000,521.86  12.02%Fuji Electric   3,551,397.70  42.67%

Name DateElected

Mohammed Khalil Al Sayed  5 Nov 2007Abdulhakeem Al-Mutawa  18 Sep 2013Muhammed Wasif Ijlal  15 Apr 2014

Costs Budgetedasper Fundsutilizedduring thePPM(2007-2010) 2007-H22014

Development Land  180.4  180.4Infrastructure Costs  118.24  29.40Fund Expenses  12.81  14.69Total 311.45 224.49

All amounts in USD million

www.ithmaarbank.com

P.O. Box 2820, Manama, Kingdom of Bahrain

T: +973 1758 4000  F: +973 1758 4017

Dilmunia, an island that embracesnature and respects our vibrant  culture and natural heritage