PROSPECTUS

The Halmahera Morotai Eco Resort

This prospectus is made for any potential investor or partner who would like to participate in this venture. The exact amount of investment that is open for participation in the region for an equity of between 49% and 51%,

with the total investment being Rp.4.000.000.000.

We are not looking for just pure investors, but persons who are able to contribute to the growth of the resort and the long term vision ,of making a ‘chain’ of “Eco”-resorts in the Halmahera region, through the ‘investor/partner’s’ business relationships and networking. This means that the potential ‘investor/partner’ will have more to contribute to the business venture than just capital.

In order to enter this lucrative and fast growing business, it is very important that you fully understand the concept, structure and the philosophy around this type of business. We are not looking for an investor who just has money but, has no interest in the social sustainability and responsibility of this project. The following are points that have to be considered before investing in this business. :

1. Why an “Eco” Type of Resort ? and what is “Eco” Tourism?

2. Location of Resort

3. Types of Dive Sites & Types of Diving

4. Location of Potential Dive Sites near Tobelo,Morotai and Kau

5. Snorkelling & Snorkelling Activities

6. Incorporation of P.T

7. Principles and Design of Resort

8. Equipments & Investment Needed For Resort

9. Equipments needed for Dive Operations

10. Equipments needed for Water-sports Operation

11. Boats needed

12. Diving Course Classroom Location

13. Licenses needed

14. Safety Concerns (Important)

15. Affiliations

16. Staffing

17. Marketing Strategies

18. Diving Courses Offered

19. Website

20. Pricing Structure

21. Investment

22. Time-frames

23. Opportunities

Why an “Eco” Type of Resort ? and what is “Eco” Tourism?

Today. The majority of tourist that visit Resorts around the world, are preferring to stay in Environmentally friendly resorts or so called “Eco” resorts. The real meaning of “Eco” used in the tourism industry is :

“Ecotourism (also known as ecological tourism) is travel to fragile, pristine, and usually protected areas that strives to be low impact and (often) small scale. It helps educate the traveler; provides funds for conservation; directly benefits the economic development and political empowerment of local communities; and fosters respect for different cultures and for human rights. An eco resort is a Eco-resort/resort that uses nature friendly resources for everything from construction to cleaning products. These resorts also reuse many of their items and try to minimize our ecological impact as much as possible.”

Eco resorts typically have a focus on learning new ways to live on the planet, bettering the environment and appreciating the natural surroundings. To accomplish this, eco resorts not only implement an environmentally-conscious approach to running their business, some also offer guests volunteer opportunities to help the environment and local community as well as a variety of eco-activities, such as nature tours and turtle-release programs

The proposed name of our resort is Halmahera Eco-Resort . The reason for choosing the name Halmahera Eco-Resort is the fact that it incorporates the name of Halmahera ,which does not tie us down to a specific location, and it gives us an opportunity in the future ,to branch out with other similar resorts in Halmahera region.. Another reason for choosing this name, is that it is internationally associated Eco-Tourism ,and therefore it is easier to market to visiting divers ,eco-tourists ,etc, than for example Morotai Resort & Dive Center, or Morotai Dive Resort etc…

Location of Resort WHY HALMAHERA?

“

”over an area of 24,500 km². Halmahera is located in the Coral Triangle, the area with the richest marine life in the planet.”

This comment has been made by highly respected marine biologists and conservationists after their visit to Halmahera recently

Maluku Utara Province in Eastern Indonesia(also known as the Spice Islands )has some of the best un-explored dive sites in the world!, specifically Halmahera. These range from Wreck Diving, Deep Diving, Underwater Photography Diving, Cave Diving, Drift Diving, & Night Diving. This is a fact that is now recognised around the world, and please look at the following websites and reports, you will understand more about the potential of this area.

· www.conservation.org/explore/asia-pacific/indonesia/halmahera/Pages/halmahera.aspx

· http://www.nature.org/wherewework/asiapacific/coraltriangle/features/halmahera.html

· http://dunialaut.com/?p=237

· http://www.bodeweb.de/halmaheraengl.htm

· http://richardkurni.multiply.com/journal/item/16

· http://www.reefbase.org/halmahera/team.aspx

Types of Dive Sites & Types of Diving

To attract divers from around the world and from other neighbouring Asian countries, we must be able to offer them many forms of diving that will keep them coming back again to the region and in particular Halmahera. The types of diving that are listed below are all available in Halmahera, provided the equipment and professional instructors are available.

Wreck diving - is a type of recreational diving where shipwrecks are explored. Although most wreck dive sites are at shipwrecks, there is an increasing trend to scuttle retired ships to create artificial dive sites. Shipwreck diving enables sport divers to visit the past. Each wreck is considered a time capsule into history waiting to be explored. Sport divers also make interesting artifact finds while exploring the remains of sunken ships. This enables the sport diving community to make its own contribution to historians and archaeologists by giving them the information needed for wreck identification and further research. Maluku Utara is rich with history from V.O.C ships, Japanese WW2 ships and recent shipwrecks. Therefore this type of diving will be very popular.

Deep Diving - The meaning of the term deep diving is a form of technical diving. It is defined by the level of the diver's diver training, diving equipment, breathing gas, and surface support:

In recreational diving, 30 meters / 100 feet may be a "deep dive"

In technical diving, 60 meters / 200 feet may be a "deep dive”

Underwater Photography Diving - is considered an especially challenging area of photography, since it requires very specialized equipment and techniques to be successful. Despite these challenges, it offers the possibility of many exciting and rare photographic opportunities. Animals such as fish and marine mammals are the most common subjects, but photographers also pursue shipwrecks, submerged cave systems, underwater "landscapes", and portraits of fellow divers.

Cave diving - a type of technical diving in which specialized SCUBA equipment is used to enable the exploration of natural or artificial caves which are at least partially filled with water. It is an extension of the more common sport of caving. Water-filled caves

attract cavers and speleologists due to their often unexplored nature, and present divers with a technical diving challenge. Caves often have a wide range of unique physical features, such as stalactites and stalagmites, and can contain unique flora and fauna not found elsewhere. Maluku Utara has many caves in which the divers can explore. One example is the caves near Goa Bokimaluru / Goa Sagea.

Drift diving - is a type of recreational diving where the diver is transported by the currents caused by the tide or in a river. The current gives the diver the impression of flying and allows the diver to cover long distances underwater, possibly seeing more habitats and formations than usual. Often drift diving is performed more for the experience of underwater "flight" and less for interactions with underwater life, which, given the speed at which most divers move, are reduced.

Normal precautions for drift diving are to have a supporting boat follow the divers and to use a surface marker buoy.

Drift diving requires more rigorous planning to be executed safely. In contrast to normal diving, drift diving is generally not planned to coincide with slack water. It is important to consider the direction of tidal streams as well as their strength to avoid divers being swept into dangerous areas such as shipping lanes. It is also important to plan for the danger of separation, either underwater or at the surface. Each diver should carry an appropriate signaling device

It is important for the diver to also have knowledge of the local rules pertaining to the use of surface marker buoys.

Night diving - is a type of recreational diving which takes place in darkness. The diver may see more and has a different underwater experience at night because many marine animals are nocturnal and the diver is forced to concentrate on smaller, nearby objects.

There are additional hazards when diving in darkness, such as torch or flashlight failure resulting in losing vertical visual references and being unable to control depth or buoyancy, being unable to read instruments such as dive computers and diving cylinder contents gauges and separation from the rest of the diving group, boat or shore cover.

Normal precautions for night diving are to have a torch/flashlight, to use a strobe light, to avoid shining your light in other divers' eyes, to know and use surface light signals and to use a surface marker buoy with an attached strobe light.

Location of Potential Dive Sites near Tobelo,Morotai and Kau

Many exploratory dives and trips have been made around the above mentioned areas and islands, by competent and experienced divers and marine biologists, mentioned in the web-links in chapter nr. 2 above. Many more dives to find the best locations will be carried out in October to December 2011 by ourselves and experienced foreign dive instructors and dive masters. These exploratory dives will logged and marked and will be kept confidential to all other resort and dive operators as we will be able to give our divers and guests their own private dive sites that not many people know about.

Snorkelling & Snorkelling Activities

Snorkelling is another form of seawater sports activity that does not require much training or expensive equipments. When our Resort opens we will also have this option available to our guests and customers, as not all people dive or are interested in diving. The snorkelling activities usually are around the resort island, or snorkelers join the same boat as the divers and go snorkelling in the same areas as the divers. The location of snorkelling sites will also be mapped and recorded during the same time as the dive sites that will be explored in October to December 2011. The snorkelling sites will be specifically marked out with the type of fish, corals and other items that the snorkelers will be able to see while snorkelling.

Incorporation of P.T

The company will be “P.T. Halmahera Island Resorts” (PT.H.I.R) and will be incorporated the city of Ternate .This is in-order to get the necessary licenses and permits easier, since it would be a locally established company, with the aim of promoting Eco Tourism to Maluku Utara, in particular to Halmahera.

Principles of Management & Operations of the “Halmahera Island Resort”

The exact design and management of the “Halmahera Island Resort” has been conceptualized with incorporating the traditional “Adat” type of housing from the Halmahera area. Depending on the location of the resort, the designs will all incorporate traditional designs and materials, but with all the amenities and comforts that the international traveler expects and demands.

The “Halmahera Island Resort” will only be built in accordance to the strict guidelines of a environmentally friendly resort, in regards to the water, sewage and garbage disposal systems that are required in order to protect the environment and lessen the pollution factors that usually are found in the construction of resorts.

“Halmahera Island Resort” will specifically be built and managed on the following principles :

Our Resort’s Responsible Tourism Policies

Management, operations and development of the The Resort will be guided by principles of social, economic and environmental sustainability
The Halmahera Island Resort’s business will be managed for the enhancement, rather than degradation, of local cultural, economic and natural environments
Management of The Halmahera Island Resort will strive to meet and exceed International Standards for Eco-Tourism
Management of The Halmahera Island Resort will strive to integrate best business practices with best environmental practices
Management of The Halmahera Island Resort will strive to maintain amicable, open communications with the local community, employing as many staff as possible from the surrounding communities
Management of The Halmahera Island Resort will strive to create new opportunities for locals to enjoy profits from eco-tourism (not just salaries) The general policy shall be that new opportunities for income should also enhance local eco-tourism generally
Management of The Halmahera Island Resort will strive to set high local standards, in service, guest experience and sustainable management, for future eco-tourism development in the area. In effect, the Eco Lodge will seek to "brand" The Halmahera Island Resort as a genuine, small-scale, eco-tourism destination
Management of The Halmahera Island Resort will strive to the provide a memorable experience for guests without compromising the principles of sustainability and ethical business
The Owners of The Halmahera Island Resort will continue to pursue a development policy, which focuses on income-growth from improving standards rather than increasing guest numbers, thereby limiting socio-environmental impacts while still providing significant income opportunities for locals
The Halmahera Island Resort will promote a general policy of land-leasing, rather than land purchase, for future developments thereby encouraging local people to retain ownership (or stewardship) of their family land
Management of The Halmahera Island Resort will encourage the staff to participate in local politics, encouraging more effective regulation and better environmental stewardship by the Community and Government

Our Environmental & Social Sustainability Management Practices

Housekeeping

We will use only Natural cleaning products in our rooms

Eucalyptus oil for floors and toilets
Baking soda for sinks and toilets
Linseed oil for wooden furniture
Newspaper for cleaning windows
Natural essential oil spray room fresheners

Natural locally produced soaps
Natural locally produced - insect repellents – (Neem, Citronella, Patchouli and Vetiver)
We change the towels only when guests request them to be changed ,and only wash them with Natural Washing Powder and Soaps

Infrastructure - Buildings

Our accommodation and infrastructure is low impact, visually and environmentally
Buildings have been built in harmony with the natural layout of the land
Local craftsmen used predominantly traditional designs and building techniques

In the Kitchen

We promote local traditional dishes
Herbs from the garden to make fresh spices and spice pastes
The possibility of guests to catch fish for meals in the seas around the resort
No MSG or other artificial flavour enhancers in our cooking
We buy our produce locally where possible
We use locally grown coffee, palm sugar, vanilla, eggs and coconuts
We use natural materials for drink coasters – banana leaves
We use only locally grown fruits, herbs and vegetables in our kitchen
No plastic straws

Pest control

Integrated pest management -Natural pest control using Neem sprays for insect control

Land management

Grey and waste/black water is treated via watertight septic tanks and vegetated – wastewater is reused to fertilize the resort’s gardens and flora.

Economic Principles

Local employment
We employ locals only (minimum 80% of staff)

We train inexperienced locals and build capacity in experienced staff
Our staff live within 30 minutes of the Halmahera Morotai Eco Resort
Our wages are above the recommended Government wages
The service charge and tips is shared evenly among all of our staff
Our staff are supported to attend religious ceremonies

Staff training

In-house - Eco-Tourism, Hospitality and Environmental Management training
Computer and English skills
Staff are provided with literature (Indonesian and English) on Eco Tourism and Sustainability issues
Staff are actively encouraged to improve their English skills

Creating employment in the community

We will train local village men to be diving and snorkelling guides
Provide First Aid and Environmental trainings
We will train 2-4 local women to practice therapeutic massage and make an income from massaging our guests

Summary of economic benefits created by the Eco Lodge

We employ only local staff from the surrounding communities, except in the instance where local staff do not have the skill set needed for that job
Wherever possible, we source products, services and building materials locally
We use only local tradesmen on all our building projects
Local men will work part-time as trekking guides, tour-guides and dive guides
2-4 local women will work part-time providing therapeutic massage

Social Work

English classes

We will conduct weekly English classes for local children aged 5 – 12 years by employing a part-time teacher to teach

Respecting local cultures and supporting local development

Guests are informed of appropriate dress and information about our local area by discussion with our staff
Guests are welcome to attend local ceremonies
Our business is approved by the traditional land owners, the local community and the local government
Feedback is sought on our business through informal staff feedback and monthly village meetings
A part time staff member represents our business at local community meetings and in general throughout the year in the community
We will support the local area by giving10% of our tour income to improve and develop this attraction
We encourage our community to seek grants and help to develop government proposals for environmental improvements in our area
Our activities utilise local services

Environmental Principles

Ongoing commitment to enhance, rather than degrade, our natural environment
We encourage a no bird-catching policy in our surrounding community
"no rubbish burning" on our property
No chemicals are used in our gardens
Protection of the reef and adjacent habitat

Guest Activities

Our activities aim to be as low impact as possible i.e. trekking in the rainforest and surrounding areas, diving with educated and trained dive guides to protect the corals and marine life
We encourage our guests to donate books, clothes and impart knowledge to the local communities in order to better their lives and livelihood, as well as foster better inter-cultural relationships and understandings.
Swimming. We have developed our reef swimming policies to enable minimum impact

Efficient use of energy

Our energy consumption through generated power is kept to a minimum
We encourage guests to turn off their lights when not in use
Because we do not use bright outdoor lighting, guests are provided with torches
Deep well water pump is on a timer
We use energy saving shower s
No bathtubs to conserve water
Energy saving light bulbs throughout the property
Energy saving front loading washing machine to reduce water and energy consumption
No clothes dryer –sun drying only
The Halmahera Island Resort uses the smallest, most economical vehicle available for pick-ups and tours

Responsible waste management

Sewage is treated on site No untreated sewage or wastewater is released into the environment
Biodegradable cleaning items, compatible with biological wastewater treatment, are used in the guest rooms, kitchen and laundry
We Recycle glass and plastic bottles and aluminium cans
We Compost all organic wastes All non recyclable rubbish is taken to the landfill
We have a "No burn" rubbish policy

Commitment to continual improvement

A part-time staff member liaises with the community on environmental and social issues
We meet monthly with our staff to talk about improvements
We teach new skills to our staff – i.e. cooking, environmental management, English
Our guests are able to give feedback through in-room feedback forms or verbally
We strive constantly to stay up to date and do better- educating ourselves and staff to do the same

Our “Resort’s Responsible Tourism Policies” Will Be Priorities That PT.Halmahera Island Resorts Will Strive To Achieve, And Any Partner Will Have To Agree To Follow These Policies

Investment

The total investment that PT.Halmahera Island Resorts will invest into the project is approximately US$ 400.000/-

This investment will be made in 4 phases, and they are:

1^st Phase: 5.50% of projected costs

The first phase of the project has already been completed and that is :

i) Establishing of the PT.Halmahera Island Resorts

ii) Feasibility survey of project visits and underwater surveys as well as site locations that are suitable plus financial and operational projections

iii) Locating a possible 3 islands in Halmahera Utara for the development of this project, and negotiated long term leases of these islands with the owners

iv) Design and concept of the resort has been done and will be finished by an architect by the end of September, complete with working drawings, mechanical and engineering drawings and specifications Application for all relevant licenses and Governmental requirements and approvals

v) Cost prognosis for the construction of the “PT.Halmahera Island Resorts”

vi) Marketing segmentation of the “PT.Halmahera Island Resorts” has been done and specific marketing strategies are being formulated

vii) Website for the “PT.Halmahera Island Resorts” is under design and construction

2^nd Phase : 37.50 %

i) Contract Negotiations and agreement for the Lease of the chosen Island with the owners, minimum 20 years lease period ,includes visits to the island and also Notaris payment for making of lease contract

ii) Payment of initial lease period (5 years) to the owners

iii) Signing contract with approved contractors & builders

iv) Down payment to builders and contractors

v) Sourcing and DP. payment of F.F.E ( furniture’s, fittings and equipments)

vi) Payment to boat builders to build purpose built dive boats

vii) Payment and delivery/installation of generators

viii) Progressive payment to builders and contractors

3^rd Phase : 37.50%

i) Progress Payment to builders/contractors

ii) Progress Payment to suppliers of F.F.& E

iii) Payment upon delivery for Boats and Outboard Motors

iv) Printing/Marketing/Sales Trips, attending tradeshows, exhibitions and promotions to Travel Agents, familiarization trips for travel agents

4^th Phase : 19.50%

i) Pre-opening Stock Purchases

ii) Rest Payment to Contractors/Builders

iii) Rest Payment for Suppliers

iv) 4 month’s operational cash requirements

Total proposed investment of the “PT.Halmahera Island Resorts Rp. 4.000.000.000 – 100%

Shareholding PT.Halmahera Island Resort 70% - 55% (Rp. 2.800.000.000 – 2.200.000.000)

Investor/Partner to Project PT ............... 30% - 45% (Rp. 1.200.000.000 - 1.800.000.000)

A proper detailed cost/investment proposal with detailed itemized costs will be presented to potential investor/partner, once a M.O.U is undertaken and a “Confidentiality” agreement has been signed between both parties.