valuation report dom park kultury march 2013 final excl ...mrics registered valuer, deputy head of...

Valuation Report Dom Park Kultury Business Center at 11A Zubovsky Boulevard, Moscow, Russia

Prepared on behalf of Fairford (Cyprus) Limited

Date of Report: 12 March 2013

Contact details Mr. Yaron Rokman President Fairford (Cyprus) Limited Agias Elenis 36, GALAXIAS COMMERCIAL CENTER, 4th floor, 1061 Nicosia, Cyprus Tel. +972544741805

Ref: CV-002/2013

Knight Frank ZAO 26 Valovaya Street Moscow 115054 Russia Thomas Pflug, +7 495 9810000 [email protected]

Valuation Report │ Dom Park Kultury Business Center, Moscow, Russia Prepared on behalf of Fairford (Cyprus) Limited│ March 2013

Executive summary The executive summary below is to be used in conjunction with the valuation report to which it forms part and is subject to the assumptions, caveats and bases of valuation stated herein and should not be read in isolation.

Address 11A Zubovsky Boulevard, Moscow, Russia.

Location The property is located in the Khamovniki District an administrative division of the Central Administrative District in Moscow.

Description Dom Park Kultury Business Center.

Areas Total area – 7,473.20 m² according to the Ownership (BTI measurement standards). Leasable area – 6,766.00 m² (own estimation that should reflect leasable area according to BOMA measurement standards1).

Tenure Freehold of the building / leasehold of the land plot.

Tenancies Single tenancy.

Valuation considerations

♦ The property is located in the Central Administrative District in Moscow.

♦ The subject property represents a 15-storey Class A office building.

♦ Strong covenant 100% occupied by TRANSAERO Airlines.

♦ The subject property has a high visibility.

Valuation date 31 December 2012

Market Rental Value2

$6,526,440 per annum (RUB 198,226,000 p.a.)

Market Value $83,893,000 (RUB 2,548,057,000)

MV analysis Initial yield (net) 9.64%Reversionary yield (net) 7.78%Equivalent yield (net) 9.47%

Market Value per m² total area $11,226

1 We recommend that our understanding of the leasable area is referred to a measurement specialist for confirmation that our

understanding is correct. 2 Office, underground parking and other income.

Valuation Report │ Dom Park Kultury Business Center, Moscow, Russia Prepared on behalf of Fairford (Cyprus) Limited │ March 2013

Contents Executive summary 2

1 Instructions 5

Engagement of Knight Frank ZAO 5

Scope of enquiries & investigations 6

Valuation bases 7

2 The property 8

Location 8

Site 10

Description 11

Accommodation 13

Services 14

Legal title 14

Tenancies 15

Condition 16

Environmental considerations 16

Sustainability 17

Planning 17

Highways and access 17

Statutory licences & certificates 18

3 Market analysis 18

Russia economic overview 18

Office market 18

Rental market 23

Investment market 26

4 Valuation 32

Methodology 32

Valuation considerations 33

Valuation bases 34

Valuation Date 35

Market Value 35


5 Property risk analysis 36

SWOT Analysis 36

Risks relating to the property 37

Income risks 37

Economic & property market risks 37

Valuation risks 38

Risks relating to the terms of the instruction 39

Appendices Appendix 1 - General Terms of Business for Russian Valuations

Appendix 2 - About Knight Frank

Appendix 3 - Location plans

Appendix 4 - Valuation calculations


1 Instructions

Engagement of Knight Frank ZAO Instructions

1.1 We refer to our agreement CV-002/2013 dated 15 January 2013 and our General Terms of Business for Russian Valuations, to provide a valuation report on the Dom Park Kultury Business Center located at 11A Zubovsky Boulevard, Moscow, Russia (“the property”). A copy of our General Terms of Business for Russian Valuations is attached in Appendix 1.

Client 1.2 Our client for this instruction is Fairford (Cyprus) Limited (“the Client”).

Valuation standards

1.3 This valuation has been undertaken in accordance with the Royal Institution of Chartered Surveyors (RICS) Valuation – Professional Standards (March 2012) Global and UK edition (“the Red Book”). RICS considers that a valuation complying with the Red Book also complies with International Valuation Standards.

The report provided under this instruction has no status of valuation services in Russia and is not carried out in accordance with the requirements stipulated in the Federal Law “On Valuation in the Russian Federation” № 135 dated July 29, 1998 as amended.

Purpose of valuation

1.4 You have confirmed that this valuation report is required for Financial Statements under IFRS.

Conflict of interest

1.5 We confirm that we have no current or recent fee earning involvement with the property, the Customer or any other party connected with this property and that we have no conflicts of interest in providing this report to you. However, as you are aware the property was valued by us in December 2011.

1.6 We are acting as External/ Independent Valuers.

Responsibility to third parties

1.7 Our valuation report is only for the use of Fairford (Cyprus) Limited, Rus Basilica Property & Investments Ltd., Elran (D.D.) Real Estate Ltd. and to Y.RSY Ltd. for Financial Statements under IFRS and no responsibility is accepted to any third party for the whole or any part of its contents.

Disclosure & publication

1.8 Neither the whole nor any part of this valuation nor any reference thereto may be included in any published document, circular or statement nor published in any way without our prior written approval of the form or context in which it may appear. If our opinion of values is disclosed to persons other than the addressee of this report, the basis of valuation should be stated.

Expertise 1.9 The valuer, on behalf of Knight Frank ZAO, with the responsibility for this report is Thomas Pflug MRICS Registered Valuer, Deputy Head of Valuation, Russia & CIS. We confirm that the valuer meets the requirements of RICS Valuation – Professional Standards VS 1.6, having sufficient current knowledge of the particular market and the skills and understanding to undertake the valuation competently.


Vetting 1.10 This report has been vetted as part of Knight Frank ZAO’s quality assurance procedures.

Scope of enquiries & investigations Inspection 1.11 We were instructed to carry out an internal and external inspection of the property.

Our inspection of the property was undertaken on 22 January 2013 by Thomas Pflug MRICS Registered Valuer, Deputy Head of Valuation, Russia & CIS.

Enquiries 1.12 The extent of enquiries made is set out in our General Terms of Business for Russian Valuations. In carrying out this instruction we have undertaken verbal/ web based enquires that are referred to in the relevant sections of this report. We have relied upon this information as being accurate and complete.

Information provided

1.13 In this report we have been provided with information by the Client. We have relied upon this information as being materially correct in all aspects.

1.14 In particular, we detail the following:

♦ BTI area calculations and floor plans, dated 10 August 2011;

♦ BTI cadastral passport dated 10 April 2012;

♦ BOMA gross area calculation, dated 21 December 2012;

♦ Cadastral passport and plan, dated 16 October 2008;

♦ Land lease agreement No. M-01-003899, dated 03 January 1996;

♦ Supplements to the land lease agreement; dated 02 December 1996, 26 November 2001, 29 March 2002, 13 January 2003, 20 January 2004, 12 July 2004, 16 December 2004, 05 August 2008, 31 July 2009 and 04 October 2010;

♦ Extract from the United State Register for Real Estate Tenure for the land plot, dated 11 October 2011;

♦ Certificate of the State Registration of Title (Ownership certificate of the building), dated 20 October 2011;

♦ Technical description of the building;

♦ Tenancy information as of December 2012.

1.15 In the absence of any documents or information provided, we have had to rely solely upon our own enquiries as outlined in this report. Any assumptions resulting from the lack of information are also set out in the relevant section of this report.


Valuation bases 1.16 In accordance with your instructions, we have provided opinions of value on the

following bases:

Market Value (MV)

1.17 The Market Value of the freehold interest in the property in its current physical condition.

The definition of Market Value in accordance with the International Valuation Standards Council (IVSC) is equivalent to the Fair Value definition adopted by the International Accounting Standards Board (IASB)3.

Valuation Date 1.18 The valuation date is 31 December 2012.

3 The references in IFRS 13 to market participants and a sale make it clear that for most practical purposes, Fair Value is consistent with

the concept of Market Value.


2 The property

Location 2.1 As can be seen from the plans below, the property is located in the Khamovniki

District an administrative division of the Central Administrative District in Moscow at 11A Zubovsky Boulevard.

Image: Regional plan


Image: Location plan

2.2 The property benefits from excellent transport accessibility to the city centre of Moscow (Kremlin) via Garden Ring/ Prechistenskaya Embankment as well as to the Third Transport Ring (TTR) and Moscow Ring Road (MKAD) via Komsomolsky Prospect. The Park Kultury metro station with its two lines (circle line and radial red line) as well as a bus stop serviced by several lines are located next to the property.

The immediate neighbourhood is comprised of office, retail (including banks, cafes and restaurants), a school and residential buildings.

Competition 2.3 The following map provides the competition in the surroundings of the property.


Image: Competition

Site Site area 2.4 We understand that the property occupies a flat rectangular site of 600 m²,

registered under cadastral number 77:01:0005015:1.

Site plan 2.5 Access to the site is provided through Zubovsky Boulevard. The property is identified on the site plan below, showing our understanding of the boundary.


Image: Site plan (Source: http://maps.rosreestr.ru/portal/)

Description General information

2.6 The Dom Park Kultury Business Center represents a 15-storey Class A4 office building with a total area of 7,473.20 m². The end of construction was June 2011.

The following table provides a breakdown of the floors by use.

Table 1, Floors by use Level Usage Total area [m²] -2 Underground parking, technical premises 385.30 -1 Underground parking, technical premises 383.90 1 Lobby, technical premises 340.70 2 Office 315.70 3 Office 466.90 4 Office 441.70 5 Office 442.10 6 Office 447.10 7 Office 441.80 8 Office 451.10 9 Office 459.40 10 Office 456.70 11 Office 544.60 12 Office 526.40 13 Office 449.50 14 Office 462.80

4 According to the Moscow Research Forum.


15 Office5 232.00 16 Technical premises 225.50 Total 7,473.20

Source: BTI documents

The basement (2 underground floors) accommodates technical premises and the underground parking for 28 car parks that can be direct accessed from the Garden Ring.

The office premises have an open floor layout.

The main pedestrian entrance is from Zubovsky Boulevard.

Construction features

2.7 The subject property has a reinforced concrete foundation. The frame, internal and external walls are constructed of reinforced concrete, steel constructions and brick. The façade is isolated, ventilated (“OLMA” system) and covered with granite. The windows are made of aluminium profile “SCHUECO” with isolated glass.

The property has two entrances, one from the Garden Ring and the second – with a ramp for handicapped people – from rear of the building. The access to the underground parking has an automatic gate and is organized by a system of traffic lights.

The construction features of the subject property comply with Class A office requirements.

Technical features

2.8 The property has the following technical features:

♦ 4-pipe HVAC system;

♦ Fiber-optical telecommunications;

♦ External and internal video surveillance system;

♦ 4 Kone elevators with a waiting time of 25 to 30 seconds – 1 elevator with a capacity of 320 kg from the underground parking to the lobby (1st floor); 3 Kone elevators (1 – 1,000 kg; 2 – 650 kg) from the lobby to the upper floors;

♦ Uninterruptible power supply system (UPS);

♦ 24-hour security.

The parking is organized by an automatic 2-level parking system (SWISS PARK), whereas every unit has a separate electric energy switch.

Fit-out 2.9 At the valuation date the property was almost fully fitted out. The premises are fitted out with materials of high quality.

At our inspection the 13th to 15th floor were not fully fitted out. However the fit-out of those premises will be according to requirements and at expenses of the current tenant.

5 According to the provided BTI documents this floor is attributed for technical premises. At our inspection we have been provided with the

information that the 15th floor will be for office usage.


Accommodation Measurement 2.10 As agreed with the Client, we have relied upon floor areas provided to us by and

stated in technical and title documentation.

2.11 At the valuation date the subject property was entirely6 leased to one tenant at a leasable area of 7,432.20 m² according to BTI measurement standards. We have not been provided with a breakdown of leasable area. In accordance with the current market practice it is common to measure the leasable area of quality office properties according to BOMA measurement standards. Based on the provided BTI documents and information provided during our inspection we made our own estimation on the leasable area as follows:

Table 2, Leasable area of the subject property Floor Description Area [m²] -2 Common corridor, lift hall 5.40 -1 Lift hall 1.50 1 Entrance hall, lift lobby, common corridor, WC 147.80 2 Office, WC, corridor 263.60 3 Office, WC, corridor 436.50 4 Office, WC, corridor 413.30 5 Office, WC, corridor 412.90 6 Office, WC, corridor 417.70 7 Office, WC, corridor 412.50 8 Office, WC, corridor 423.80 9 Office, WC, corridor 432.00 10 Office, WC, corridor 429.10 11 Office, WC, corridor 515.40 12 Office, WC, corridor 497.30 13 Office, WC, corridor 421.60 14 Office, WC, corridor 434.70 15 Office, WC, corridor 218.10 Total potential leasable area according to BTI 5,883.20Adjustment coefficient BTI-BOMA* 1.15 Estimated leasable area according to BOMA 6,765.68Rounded 6,766.00* Based on our professional opinion

Thus, we have estimated that the subject property has a leasable area of 6,766 m² according to BOMA measurement standards. It must be noted that according to the BTI documents the premises in the 15th floor are attributed for technical use. At our inspection we have been provided with the information that the 15th floor will be for office usage. We recommend that our understanding of the leasable area is referred to a measurement specialist for confirmation that our understanding is correct.

The subject property provides underground parking for 28 car spaces (SWISS

6 Including underground parking, technical premises, staircases, lift shaft etc.


PARK).

Services 2.12 In accordance with the General Terms of Business enclosed at Appendix 1, no tests

have been undertaken on any of the services.

We have assumed for the purposes of this valuation that mains i.e. heating, water, electricity, drainage and telecommunications are all available to the subject property.

Legal title Land register searches

2.13 As stated in our General Terms of Business for Russian Valuations, we do not undertake searches or inspections of any kind (including web based searches) for title or price paid information in any publicly available land registers.

Sources of Information

2.14 We have been provided with copies of certificates of the State Registration of Title and a land lease agreement (incl. supplements), on which we have relied upon. We confirm that the property valued, is the property described in these documents. We also confirm that we have taken the certificates of the State Registration of Title into account in making our valuation and that there is nothing contained within the certificates of the State Registration of Title that would cause us to alter our valuation report.

2.15 In our valuation we have taken into account that the title documentation does correspond to the factual building area and we have assumed a good and marketable title and that all documentation is properly drawn.

2.16 We recommend that our understanding of all legal title issues is referred to your legal advisers for their confirmation that our understanding is correct. It is also particularly important that your legal advisers should be asked to check whether there have been any transactions relating to the property which reveal price paid information that we should be made aware of.

2.17 If any matters come to light as a result of your legal adviser’s review of these issues, we request that these matters are referred back to us as this information may have an important bearing upon the values reported.

Tenure 2.18 According to the title documents provided by the Client the building is held freehold and the land plot is leasehold.

2.19 The land plot with the total area of 600 m² (cadastral number 77:01:0005015:1) where the Dom Park Kultury Business Center is situated is held leasehold (Extract from the United State Register for Real Estate Tenure, dated October 11, 2011; land lease agreement No. M-01-003899, dated January 03, 1996; supplements to land lease agreement, dated December 02, 1996, November 26, 2001, March 29, 2002, January 13, 2003, January 20, 2004, July 12, 2004, December 16, 2004, August 05, 2008, July 31, 2009 and October 04, 2010) by AM-Building Center ZAO on a long-


term lease for 42 years and 11 months7 from February 12, 2002 till January 03, 20458. According to the Russian land codex the land plot belongs to the category of settlement land and has the permitted use of the construction of a commercial business center and the usage of it.

The building with a total area of 7,473.20 m² is held freehold by AM-Building Center ZAO by the certificate of state registration of freehold title (Ownership Certificate) No. 77-АН 558629, dated 20 October 2011.

2.20 We have assumed that normal covenants and liabilities devolve upon the lessee. It is further assumed that there are no onerous restrictions or outgoings contained within the lease that would impact the valuation provided within this report.

2.21 These assumptions should be verified by your legal advisors. If they prove incorrect, any variation may have a material impact on the value and should be referred back to us for further comment.

Covenants 2.22 Incorrectly drawn title documentation is a matter which has a potentially significant effect upon value. However, in our valuation we have assumed a good and marketable title and that all documentation is properly drawn.

Rights of way 2.23 We have not been provided with any information on rights of way and recommend that your legal advisers are instructed to investigate this matter further.

Tenancies 2.24 We have been provided with tenancy information by the Client and have relied on

that information as being correct.

Tenancy information

2.25 The property is let, in its entirety to TRANSAERO Airlines for a term of 10 years at a passing rent of $6,650,000 per annum. The lease thus expires in 10 years on November 13, 2021. The lease is subject to annual indexation.

The terms of the tenancy can be summarised as follows:

Landlord: AM-Building Center ZAO;

Tenant: TRANSAERO Airlines OAO;

Lease start: 14.11.2011;

Lease end: 13.11.2021;

Leasable area: 7,473.20 m² (total area according to BTI measurement);

Base rent: $6,650,000 per m² p.a. (as of commencement date for the entire building);

7 It is a familiar practice in the Russian market for the land lease agreement to be renewed at the end of the lease term. This does not have

any regard for lease length which can range from 3 to 49 years and therefore for the valuation the assumption is made that the lease term will continue to be renewed. Hence the lease is treated as a virtual freehold.

8 According to the land lease agreement dated January 03, 1996, initially the land plot was held leasehold by Center Mezhregionalnich Programm AOZ for 49 years.


Operating expenses and utilities: paid by the tenant (except for property tax and land lease).

Indexation/rental uplift: Annual increase of 3.5% starting from 14.11.2012 for 5 years; annual increase of 4.5% starting from 14.11.2017 until lease expiry. Additional rent: $1,449,000 p.a. for 5 years from 14.11.2012 till 13.11.2017 to compensate the fit-out expenses of the landlord;

Security deposit: 4 month base rent;

Bank Guarantee 1: 2.5 month base rent to secure the rental payment;

Bank Guarantee 2: $3 million to secure the additional rent.

In addition to the rental payment TRANSAERO Airlines pays $120,000 p.a. for signage.

Condition Scope of inspection

2.26 As stated in the General Terms of Business for Russian Valuations attached, we have not undertaken a building or site survey of the property.

2.27 During our limited inspection we did not inspect any inaccessible areas. The mentioned measures are needed to be taken. Apart from that we are of the opinion that the property is free from significant defects or items of disrepair.

Comments 2.28 We have assumed that it is in sound order and free from structural faults, rot, infestation or other defects, and that the services are in a satisfactory condition.

2.29 At the date of inspection, the building appeared to be in a generally reasonable state of repair commensurate with its age and use. No urgent or significant defects or items of disrepair were noted which would likely give rise to substantial expenditure in the foreseeable future or which fall outside the scope of the normal annual maintenance programme.

Ground conditions

2.30 We have not been provided with a copy of a ground condition report for the site. We have assumed that there are no adverse ground or soil conditions and that the load bearing qualities of the site are sufficient to support the building constructed thereon.

Environmental considerations Flooding 2.31 We have been unable to ascertain the risks of flooding relating to the subject

property. We have therefore assumed that the risk is low and will not affect the property’s value.

Contamination 2.32 As stated in the General Terms of Business for Valuations, investigations into environmental matters would usually be commissioned from suitably qualified environmental specialists. Knight Frank is not qualified to undertake scientific investigations of sites or buildings to establish the existence or otherwise of any environmental contamination, nor do we undertake searches of public archives to seek evidence of past activities which might identify potential for contamination.


2.33 During our inspection, there was no visible contamination on site. Furthermore, we have not received any information about contamination. Our valuation has been prepared on the assumption that the site is not contaminated.

Sustainability 2.34 The issue of sustainability is becoming increasingly important to participants in the

property market. There is a general expectation that buildings that minimise environmental impact through all parts of the building life cycle and focus on improved health for their occupiers may retain value over a longer term than those that do not. Sustainable buildings should optimise utility for their owners and occupiers and the wider public, whilst minimising the use of natural resources and presenting low environmental impact, including their impact on biodiversity. Definitions of sustainability address both social equity, for example, indigenous and affordable aspects, and environmental impacts, including energy use, both within and “upstream” from the building itself, in terms of the resources consumed in creating and operating it.

2.35 From a value perspective, sustainability is likely to be a long term issue and its relative importance will change over time. Our valuation provides our opinion of value at the valuation date based on market related factors at that date.

Planning Sources of planning information

2.36 We have not made any enquiries of the appropriate Planning Authority in respect of matters affecting the properties. Where reassurance is required on planning matters, we recommend that formal written enquiries should be undertaken by your legal advisors who should also confirm the position with regard to any legal matters referred to in our report. We assume that property has been constructed and will be occupied or used in accordance with the appropriate consents and that there are no outstanding statutory notices.

2.37 These enquiries should not be taken as personal searches and information on the relevant website is assumed to be both accurate and up to date. For a formal planning enquiry to be made, the Local Authority will require written representation which has not been possible as part of our report.

2.38 We have not been provided with any planning information.

Planning restrictions

2.39 The property is not located within a Conservation Area.

Highways and access Highways 2.40 We are unaware of any highway proposals that may have a detrimental effect on the

value of the property.

Access 2.41 In reporting our opinion of value, we have assumed that there are no third party interests between the boundary of the subject property and adopted highways and


that accordingly the property has unfettered vehicular and pedestrian access.

Statutory licences & certificates Energy Performance Certificates

2.42 Some properties may have an Energy Performance Certificate (EPC) when they are constructed, let or sold. Larger public buildings may also have a Display Energy Certificate (DEC).

We have not seen any such documents relating to the property and cannot comment further in this regard.

Fire safety 2.43 It is a requirement for a fire safety risk assessment to be carried out and for a fire management plan to be maintained.

We have not viewed any such documents relating to the property and have assumed for the purposes of our valuation that the relevant requirements have been fully complied with.

3 Market analysis

Russia economic overview 3.1 ♦ GDP growth in 2012: 3.4%

♦ Inflation in 2012: 6.6%

♦ Unemployment rate as at December 2012: 5.3%

♦ Current refinancing rate: 8.25%

♦ Exchange Rates as at 31.12.2012: RUB 30.3727 per 1 USD; RUB 40.2246 per 1 Euro

♦ EURIBOR 12M as at 31.12.2012: 0.542%

It should be appreciated that this section of the valuation report is published for general information only and while rigorous research has been used in its preparation, the information should not form the basis of any formal decision. Being a general report, the material does not necessarily represent the view of Knight Frank ZAO in relation to specific properties can be accepted by Knight Frank ZAO resulting it.

Source of information

3.2 Our market analysis has been undertaken using market knowledge within Knight Frank ZAO, enquiries of other agents, searches of property databases, as appropriate and any information provided to us.

Office market Supply 3.3 In 2012 about 218,500 m² of Class A office space were completed and delivered.

Including the new supply delivered in 2012, the Class A office stock in Moscow


amounts to about 2.558 million m².

The new high quality office space construction volume in Moscow has been gradually declining over the past four years and in 2012 reached a record low since 2004. However, according to our estimates, in 2013, the situation will change with the volume of new supply growing to almost a double of 2012 figure.

Graph 1, Delivery of quality office space in Moscow

Source: Knight Frank Research, 2013

It should be noted, that the provision of office space per capita is still low compared to the relatively developed markets of the world capitals. However, despite the record low volume of new construction in 2012, Moscow office real estate market continues to develop much more rapidly than the markets of most European cities.

In 2012, decentralization of business life in Moscow has increased: more than 80% of new delivery was built outside the Garden Ring. Although some infill development is taking place in the city centre, the number of such projects is low, and we estimate further reduction in the amount of new construction within the Garden Ring down to 10% of the annual construction volume.

Establishment of decentralized business districts continues on the office market of Moscow, where construction of a number of landmark projects has been announced. The Leningrad direction area is becoming one of such districts, where in 2012 Class A office complexes (Alcon with office area of 66.7 thousand m² and Skylight with office area of 61.2 thousand m²) were built and four projects are in various stages of construction.

Several business parks will also be introduced in the coming few years. Office properties of this type imply location outside of the city, and are being developed near Moscow Ring Road (MKAD) in the North-western and South-western directions. Among the biggest and most anticipated properties worth mentioning are the K2,

thousand m² %


Dudkino, Telecom City and Orbita (phase II).

MIBC "Moscow-City" is also being actively developed; here, over 300 thousand m² of office space will be delivered in 2–3 years time.

The following map provides an overview of the key projects delivered in 2012.


Demand and take-up

3.4 The demand for high quality office space in Moscow remains almost unchanged since 2011. A relatively high take-up in Q1 dropped in Q3 due to some slowdown over the summer months, though then habitually recovering in Q4 to the point of almost doubly exceeding Q3 values.

At the end of 2012, the office space take-up volume in Classes A and B amounted to approximately 950 thousand m², which is comparable to 2011 figures, reflecting the


general trend of stability characteristic of today's market.

In 2012, the largest share, amounting to almost a quarter of total office space demand within the take-up structure, belonged to financial sector companies. Financial organizations traditionally consume a large share of high quality office space – since 2007, it had not dropped below 15%. It is worth noting that in 2012, the banking sector companies also conducted several major acquisitions of office space. Industrial companies in 2012 increased their share by almost three times – up to 19%, whereas oil and gas production companies’ share dropped by almost a third. Traditionally, with the exception of 2010, there is a strong demand from the IT and telecom industry, whose share in 2012 amounted to 20% of the take-up volume.

Throughout the year, a downward trend of the vacancy rate has been observed, caused by a strong demand and extremely low volume of delivery. However, the vacancy rate in Class A category remained almost unchanged at 12.6%, primarily due to the migration of tenants between Class A properties. Class B share fell to 14.5%, almost reaching the level of 2008. It is important to note that in 2013, the market is expected to increase delivery volume, and, bearing in mind current level of demand, it is hard to expect further decline in vacancy rates.

The following map provides an overview of key deals in 2012



Forecast 3.5 Supply

In coming years, we expect a growth of construction activity on the office space market in Moscow. A significant amount of A and B+ Class office space with a total area of more than 1.2 million m² is planned for delivery in 2013. Even considering the possibility of postponement of the delivery date, we expect the figure to exceed that of 2012 by at least 40%.


Take-up

The office space demand is determined by the state of the economy in general and largely depends on such factors as the expansion of personnel of Russian companies, as well as market entrance and business development of the Western companies.

At present, the market is characterized by some degree of uncertainty, partly due to the Euro zone recession, which in case of a negative scenario development will affect economies of many countries. However, in case of a moderate scenario, should the impact of the recession on the Russian economy in 2013 be minimal, we expect take-up volume to remain at the level of 2011–2012, at about 1 million m².

Rental market Background 3.6 Due to imbalance between supply and demand, rental rates had fallen from the

peak of the market in summer 2008 by about 50-60% on average by Q3 2009. Following the stabilization in the period from Q1 2010 till Q4 2010 the market recovered and rental rates have been increasing until Q4 2012 by approximately 35% compared to the bottom of the market.

Graph 2, Development of Class A and B office rental rates [$ per m² p.a.]


Commercial Terms

3.7 The average range of net rental rates (triple net) in Q4 2012 was between $650 and $1,200 per m² p.a.; for Class A and $350 to $650 per m² p.a. for Class B+ respectively. Class A rents for prime Class A office space vary from $1,000 to $1,300. Operating expenses are in the range of $110 to $210 per m² p.a. in the Class A segment and $80 to $120 for Class B+ office space.

The most usual lease term for tenants leasing large areas is 7 years.

Forecast 3.8 We expect the balance between supply and demand on the office market of Moscow to persist, with a possible increase in lease rates in the range of 2–3%.

Evidence of comparable lettings

3.9 We have had regard to the following evidence office space:


Property address

Lighthouse 26 Valovaya Street

Knight Frank Database

Class: A Total area: 44,580 m² Infrastructure: Restaurant, canteen,

fitness center, swimming pool, retail zone

Technical specification:

Open floor layout, ceiling height 3.3 m, 2-pipe HVAC system, fiber-optical telecommunications, panoramic elevators

Floors: 12-14 Parking: Multi-level aboveground

parking (floors 1-4, ratio 1:60), surface parking

Metro: Dobryninskaya (3 to 5-minute walk), Paveletskaya (5 to 7-minute walk)

Rent (asking price):

$750-$1,100 per m² p.a. for office premises (shell & core, BOMA) and $4,800 per space p.a. for parking, net of utilities, OPEX and VAT


Wall Street 37 Valovaya Street


Class: A Total area: 33,310 m² Infrastructure: Canteen, bank branch Technical specification:

Open floor layout, HVAC system, fiber-optical telecommunications

Floors: 8 Parking: Underground parking Metro: Dobryninskaya (3-minute

walk), Paveletskaya (7-minute walk)

Rent (asking price):

$750-$950 per m² p.a. for office premises (shell & core, BOMA) and $4,800 per space p.a. for underground parking, net of utilities, OPEX and VAT

Imperial House 6 Yakimansky Lane


Class: A Total area: 43,130 m² Infrastructure: Restaurant, café Technical specification:

Open floor layout, HVAC system, fiber-optical telecommunications

Floors: 5 Parking: Underground parking ratio

1:60 Metro: Oktyabrskaya (5-minute

walk) Rent (asking price):

$900 per m² p.a. for office premises (shell & core, BOMA) and $6,000 per space p.a. for underground parking, net of utilities, OPEX and VAT


3.10 According to the rental comparables above and in accordance with our professional market knowledge we believe that the net market rent9 for the subject premises (office and underground parking) in fitted-out condition would be $6,494,440 per annum based on the following:

Table 3, Market rent Usage Leasable area

[m² - spaces] Net market rental rate [$/m²-space p.a.]

Net Market Rent[$ p.a.]

Office 6,766 940 6,360,040 Underground parking 28 4,800 134,400 Total 6,494,440

Furthermore we have applied income from telecom providers in the amount of $32,000 p.a. Thus, the total Market Rental Value amounts to $6,526,440 p.a.

3.11 In arriving at our opinion of market rent we have taken into consideration the above provided comparables as well as our expert opinion with the involvement of Knight Frank Office Department. The provided comparables vary depending on the location, tenant profile and outlet size and delivery condition (shell & core or fitted-out). The property is located in the Central Administrative District and benefits from excellent transport accessibility to the city center of Moscow as well as to the Third Transport Ring (TTR) and Moscow Ring Road (MKAD) and has a high visibility due to its height and location on the first line of Zubovsky Boulevard. The Park Kultury metro station is located next to the property. The building is fitted-out with materials of high quality. Furthermore it must be noted that the subject property is suitable for single tenants requiring a quality office building in a very good, visible location for their headquarters.

Void and reletting prospects

3.12 We have allowed for a 6-month expiry void period for the office premises and underground parking, in our opinion, are required to adequately market them and secure a letting to a single tenant. For a multiple tenancy this period would be extended to 12 months or even more.

Investment market Background 3.13 Impact of the 2008 crisis

Following the financial and economic crises in 2008, the sentiment towards the commercial property investment market in Russia had been weakening until the end of 2009 due to

a) The lack of financing for property investments in Russia by requesting investors to finance with equity only. As a result, the overall potential investment volume significantly reduced, returns are negatively affected (no positive leverage) and investors’ allocation risk increases.

b) The strong impact of the worldwide economic crisis and falling commodity 9 Net of operating expenses, utilities and VAT (triple net).


prices on the Russian economy in general and real estate occupiers in particular.

c) Reduced spread between investment returns in Russia and established real estate investment markets (US, UK, Europe). In the light of the decrease of property prices (and resulting increase of returns) in established markets, real estate returns in Russia became relatively less attractive than compared to the pre-crises time.

The majority of Western real estate investors had therefore (temporarily) withdrawn from Russia or put their activities on hold. Property owners, who were not facing financial constraints, were on the other side waiting for the market to improve before selling. As a result we had witnessed far fewer transactions and smaller lot sizes in 2009 compared to the pre-crises situation.

However since Q4 2009 we have witnessed again a change in the market. Due to an increasing interest of mainly local investors and owner occupiers a number of commercial real estate sales and investment transactions closed since the beginning of 2010 in Moscow/ Moscow Region and capitalization rates have been decreasing again. Since beginning of Q2 2010 we have also seen first international investors, including first time investors returning to the market.

Financing 3.14 In 2011 we have witnessed an ongoing positive trend on the real estate investment market. The number of financing transactions on the commercial real estate market increased by 25% compared to 2010. Mainly Russian state banks continued to drive financing of commercial property construction. In the first half of 2012 lending to the corporate sector continued to increase, but the growth rate slowed down compared to the same period of last year. This is the result of the banks' funding deterioration since the end of 2011, which in turn led to a tightening of credit conditions and the rise in the cost of debt financing.

Sberbank announced plans to increase the pace of real estate lending by 15-20% in 2012. During the first half of the year the bank has already approved a number of large loans, including a long-term loan of $ 715 million for the acquisition of the shopping center "Golden Babylon Rostokino" by the company Immofinanz. Also VTB financed buyouts of the Moscow government shares (underground parking) in the shopping center "Afimoll" by AFI Development.

Activity of Western banks in the whole market was considerably reduced; the only example of a major project of financing commercial real estate is a loan given by the European Bank for Reconstruction and Development (EBRD) to the German company “Globus Group” for the construction of four hypermarkets in Russia.

Difficulties with funding of many Russian and foreign banks forced them to reduce significantly real estate lending. At the same time, between the banks with liquidity, there is competition for prospective clients against reduction in demand for credit.

In general, banks are still largely focused on the solvency of potential borrowers. In the case of project finance there is still in the foreground the ability of the project to continue to generate sufficient cash flows for the loan. Usually banks provide funds in an amount not to exceed half of the estimated cost of the project at the rate of 12%


or more. In the case of refinancing the loan at the current commercial real estate the amount off loan can be up to 70% of the collateral value, and the loan interest rate is 9% or more.

The following table shows examples of financing for office properties/ developments.

Table 4, Key financing transactions for office properties/ developments in 2011 Lender Borrower Purpose Transaction

volume Sberbank ALCON Construction of the Alcon

Business Center at Leningradsky Ave in Moscow

$110 million (7-year credit line)

Sberbank Mezhdunarodny Centr Development

Completion of Mirax Plaza mixed-use center in Moscow

$394 million

Gasprombank City-Palace Construction of the Evolution Tower mixed-use center

$345 million

Nordea Bank AFI Development and Snegiri Development

Refinancing Four Winds Plaza

$170 million

UniCredit Bank Hines Ducat Place III $205 million

Source: Knight Frank Research (based on from open access sources), 2012

Supply/ Demand

3.15 In the first half of 2012, the transaction volume in the commercial real estate segment in Russia exceeded $ 3.3 billion, which is 23% lower compared to the same period of the previous year, but higher than in 2010.

Increase in the activity of foreign investors expected by some market players in the first half of 2012 did not happen - only four transactions were carried out with the participation of foreign capital. It is worth noting that, historically European funds and other institutional investors dominated in the Russian markets, which are now in a quite difficult position: connected with Western banks, they lack funding. At the same time, the participation of foreign investors in transactions shows continued interest in the Russian market.

Asian and Middle Eastern investors, whose activity on the European market grew significantly in 2012, prefer to invest in stable markets, relying on their growth in the future. However, many of them evince interest to developing countries, including Russia, but the increased risks associated with administrative barriers and lack of transparency in the industry generally keep them from action.

Among investors there is still interest in the premium sites located in Moscow and St. Petersburg. In addition, the opportunity to improve the profitability of a property is getting more important. For example the optimization of the pool of tenants and management process can allow the owner to increase net rental income. Another interesting possibility would be buying outdated facility with a good location for further reconstruction and increasing its class.

In 2011/ 2012 foreign investors also became active purchasers again and have been


involved in a number of completed and on-going transactions. The following table provides key transactions in office estate in 2011/ H1 2012.

Table 5, Key investment transactions in 2011/ 2012 Buyer Vendor Property Transaction

volume O1 Properties Evans Randall Silver City $333 million O1 Properties Hines Global REIT Ducat Place III $360 million Sponda PLC UFG Bakhrushin House $47 million UFG Real Estate Capital Group BC Pushkinsky Dom

BC Concord $243 million

VTB Capital Coalco Share in White Square and White Gardens

$675 million

Heitmann European Property Partners

Capital Partners Office Building 2 at Metropolis mixed-use center

$200 million

Hines Global REIT Fleming Family Gogolevsky BC $96 million O1 Properties VTB Capital Lesnaya Plaza $210 million


The number of purchases of office space of commercial companies (especially banks) began to rise again for their own use. For example, Raiffeisenbank and Alfa Bank acquired properties in “Nagatino i-Land”.

Sales prices 3.16 The average asking sales prices for Class A office space in Moscow are currently between $6,000 and $8,000 per m² total area, for Class B $4,000 to $6,000. This is an average range of sales prices for Class A and B+ offices in Moscow, including the city center, outside Garden Ring as well as outside the Third Transport Ring. The prices vary depending mainly on the location, tenancy situation, outlet size and quality of the properties.

Forecast 3.17 There is still an uncertainty for the future development of the real estate investment market. Investors postpone decisions in the hope that future political developments and economic measures taken by European governments and other organizations will be able to clarify the further development of the situation.

Thus, we see a very mixed picture in the investment market. On the one hand, there are owners willing to sell their assets, on the other - investors are interested in purchasing quality real estate properties. But in the end, only a few negotiations end in transactions.

We estimate the total volume of transactions in 2012 to be about $5.5 billion, which is about 30% less compared to the previous year (more than $8 billion), but higher than the level in 2010 by more than 30%.

Evidence of comparable sales offer

3.18 The current market fails to provide a sufficient number of sale transactions the information on which is complete and reliable. This is also true of the few office centers offered for sale at the moment. The following comparables show asking prices of office centers located in Moscow. The prices vary depending on location (proximity to the city center/ accessibility/ visibility/ neighbourhood), quality, tenancy


situation, size10 of the premises and deal structure (share or asset deal).

Property address

Aquamarine III 26 Ozerkovskaya Embankment


Class: A Total area: 76,620 m² Leasable area:

n/a

Infrastructure: Bank branch, restaurant, canteen, retail zone


Open floor layout, HVAC system, fiber-optical telecommunications, shell&core

Floors: 8 Parking: Underground parking Metro: Paveletskaya (10-minute

walk) Asking price: $7,000 per m² total area

Wall Street 37 Valovaya Street


Class: A Total area: 33,316 m² Leasable area:

19,476 m²

Infrastructure: Retail zone, bank branch, canteen


Open floor layout, HVAC system, fiber-optical telecommunications, shell & core

Floors: 8 Parking: Underground parking Metro: Dobryninskaya (2-minute

walk) Asking price: $7,200 per m² total area

Capitalization rates

3.19 On the Russian real estate investment market there is still very little market information on transactions openly available that may be used as comparable evidence to the subject property in terms of location, design, concept, building quality, tenant mix and lease terms. In addition transaction details that may

10 Some office centers have a high loss factor. Thus, prices per m² total area are lower than for those with a lower loss factor.


significantly influence the final purchase price (such as legal and tax structure/issues, underlying rental rates including upside potential etc.) are particularly not disclosed and therefore might require a correction of the yields quoted.

Historical background

Capitalization rates for prime office properties in Moscow were constantly compressing until Q1 2008 and were, for prime investment product, in the range of 7.50-8.50% (assuming lease-out at fair market rental rates; absence of any disadvantageous tax or legal issues). The global financial crisis and the start of the economic crisis in Russia in autumn 2008 reversed this process; the few remaining real estate investors were suddenly demanding significant higher returns expressed in cap rate expectations for prime properties in the range of 11.0-13.0%. At these cap rates, vendors were not willing to sell (except for those who were forced to) which resulted in a steep decline in the number and volume of investment transactions. This situation continued until the end of Q3 2009. However since Q4 2009 we have witnessed again a change in the market. Due to an increasing interest of local investors and demand from owner-occupiers a number of transactions in the commercial property segment were closed since the beginning of 2010 and capitalization rates started decreasing again.

Office investment market 2012

Though – due to the lack of recently closed comparable investment transactions – there are no real comparables existing that could serve as a benchmark, we assume – based on recent offers and ongoing negotiations with the involvement of our colleagues from the Investment Department – that capitalization rates for prime office properties are now between 8.00% and 10.00%.

The Hardcore we have capitalized at a rate of 9.25% (15% for other income). The capitalization rate we have applied is an ‘all risks’ yield11 and in our opinion adequately reflects:

♦ The Dom Park Kultury Business Center was constructed according to quality standards and represents an Class A office center;

♦ The property represents a newly constructed office building that was very well maintained at the valuation date;

♦ The fit-out is of a very high quality which will ensure a maintaining long-term value of the property;

♦ The location/ accessibility – The property is located in the Central Administrative District and benefits from excellent transport accessibility to the city center of Moscow as well as to the Third Transport Ring (TTR) and Moscow Ring Road (MKAD) and has a high visibility due to located on the first line of Zubovsky Boulevard. The Park Kultury metro station is located

11 The all-risk yield makes allowance for possible risks such as vacancy, voids, capital expenditure etc.


next to the property.

The Layer we have capitalized at a rate of 12.75%. The difference between the Hardcore and Layer yields will cover the additional risks as the leased premises of the subject property are currently and over the entire term over-rented.

Potential purchasers

3.20 Potential purchasers are mainly international investment funds who look for core, medium to long-term investment projects and local or Western occupiers looking to purchase a quality office building in a very good, visible location for their headquarters.

4 Valuation

Methodology 4.1 Our valuation has been undertaken using appropriate valuation methodology and our

professional judgement.

Comparative and Investment Method

4.2 Our valuation has been carried out using the Investment Method. In undertaking our valuation of the property, we have made our assessment on the basis of a collation and analysis of appropriate comparable investment and rental transactions/ negotiations, together with evidence of demand within the vicinity of the subject property. With the benefit of such information we have then applied these to the property, taking into account size, location, terms, covenant and other material factors.

4.3 Taking into account the type of the property, namely Dom Park Kultury Business Center suitable for rental business, we believe that the most appropriate method for its valuation is the Income Capitalization Approach.

Income Capitalization Approach

4.4 The Income Capitalization Approach is used for valuing properties that are potentially capable of generating income. So in our opinion, it is most appropriate for the valuation of premises in an office center. The Income Capitalization Approach suggests that the value of a certain property on the valuation date is the present value of the net income which may be received by the owner during future years when the building is operational and let.

In valuing the Subject Property we have used the Hardcore Method. The Hardcore Method values rental income in layers. The lowest risk ‘core’ income (market rent) is valued into perpetuity at the hardcore rate. The Layer reflects the current rental stream that exceeds the ‘core’ income until its lease expiry.

The basic formula for valuing the Subject Property by the Hardcore Method is as follows:

⎥⎦

⎤⎢⎣

⎡+−+⎥

⎦

⎤⎢⎣

⎡= −n

lhh

)i1(xi1x)NINR(

i1xNIGV


GV – Gross unrounded capital value

NI – Net current rent per annum

NR – Net open Market Rental Value (MRV) per annum

i h – Hardcore rate (yield)

i l – Layer rate (yield)

n – Number of years from the valuation date to the reversion to Market Rent

Valuation considerations Current rent (Term)

4.5 Net rental income

In our calculations we have taken into account the current rental stream of the subject property. The details of the current leases, as provided by the Client, are shown in the table below.

Table 6, Current rental income breakdown Date Indexed base rent (BR)

[$ p.a.] Additional rent (AR) [$ p.a.]

Rent [$ p.a.]

14.11.2012 6,914,430 1,449,000 8,381,750 14.11.2013 7,156,435 1,449,000 8,622,646 14.11.2014 7,406,910 1,449,000 8,871,974 14.11.2015 7,676,187 1,449,000 9,130,028 14.11.2016 8,021,615 1,449,000 9,397,114 14.11.2017 8,382,588 8,253,529 14.11.2018 8,759,804 8,624,938 14.11.2019 9,153,996 9,013,060 14.11.2020 9,509,649 9,418,648

OpEx and utility payments

According to the information provided by the Client, the operating expenses payable by the tenants cover all the expenses incurred by the property owner in the amount of 756,000 p.a. (i.e. property and facility management costs, insurance, utilities etc.).

Non-recoverable costs/ net operating income (NOI)

According to information provided by the Client the property is associated with the following non-recoverable costs:

♦ Land lease payment $40,000 p.a.12;

♦ Property tax.

12 For the purpose of this valuation we have assumed that the amount of land lease will remain unchanged throughout the term of the

current leases.


Table 7, Property tax projections Year Property tax [$ p.a.]

2013 387,000 2014 374,100 2015 361,329 2016 348,979 2017 337,037 2018 325,489 2019 314,323 2020 303,524 2021 293,082

Thus, the net operating income for office/ parking lease at the valuation date amounted to $7,936,430 p.a.

Other income

According to information provided by the Client the income from the telecom providers Sovintel and MTS amounts to $32,000 p.a.

Income for signage paid by TRANSAERO Airlines amounts to $120,000 p.a.

Market Rental Value (Reversion)

4.6 Following the expiry of the lease we have applied net market rental rates and leasable areas as set out in paragraph 3.10.

In accordance with the area and floor layout of the property we are of the opinion that it is the most probable approach to lease the property to a single tenant. The location, on the first line of Zubovsky Boulevard (Garden Ring) and its associated high visibility will attract medium to large size entities for their headquarters.

Other income from telecom providers have been assumed unchanged. To reflect higher risks associated with it this income was capitalized at a 12% capitalization rate.

We have not assumed a reversionary income from signage since we do not believe this is a guaranteed income upon the tenants (TRANSAERO Airlines) lease expiry.

Calculation 4.7 This valuation does not reflect purchaser’s costs, which we would anticipate to be approximately 1.5% of the property value, including legal and tax advisers’ fees.

The valuation calculation is attached as Appendix 7.

Valuation bases Market Value 4.8 Market Value is defined within RICS Valuation – Professional Standards (March

2012) Global and UK edition as:

“The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and where the parties had each acted


knowledgeably, prudently and without compulsion.”

Fair Value 4.9 Fair Value, in accordance with the definition adopted by the International Accounting Standards Board (IASB), is defined within RICS Valuation – Professional Standards (March 2012) Global and UK edition as:

“The price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date”.

The definition of Market Value in accordance with the International Valuation Standards Council (IVSC) is equivalent to the Fair Value definition adopted by the International Accounting Standards Board (IASB)13.

Valuation Date Valuation Date 4.10 The valuation date is 31 December 2012.

Market Value Assumptions 4.11 Our valuation is necessarily based on a number of assumptions which have been

drawn to your attention in our General Terms of Business and within this report.

Market Value

4.12 We are of the opinion that the Market Value of the freehold interest in the property, at the date of valuation is:

$83,893,000 (Eighty Three Million, Eight Hundred and Ninety Three Thousand US Dollars), net of VAT.

Valuation analysis

4.13 We have applied the Income Capitalization Approach to determine the market value of the property. The table below sets out net yield profile on net income:

Table 8, Yield profile

Initial (net) 9.64% Reversionary (net) 7.78% Equivalent (net) 9.47%

Source: ARGUS Circle Investor

4.14 Our opinion of Market Value equates to a capital value of $11,226 per m² total area, net of VAT.

13 The references in IFRS 13 to market participants and a sale make it clear that for most practical purposes, Fair Value is consistent with

the concept of Market Value.


5 Property risk analysis

SWOT Analysis

Strengths Weaknesses ♦ The building is held freehold;

♦ The land plot is held leasehold on a long-term lease;

♦ Excellent transport accessibility to the city centre of Moscow (Kremlin) via Garden Ring/ Prechistenskaya Embankment as well as to the Third Transport Ring (TTR) and Moscow Ring Road (MKAD) via Komsomolsky Prospect;

♦ High visibility – the property is located on the first line of Zubovsky Boulevard (Garden Ring);

♦ The property is newly constructed;

♦ The construction and fit-out of the subject property complies with quality standards which will ensure a maintaining long-term value of the property;

♦ 100% occupancy under a long-term lease agreement (10 years) with an annual increase;

♦ Strong covenant of the tenant TRANSAERO Airlines;

♦ Proximity to the next metro station – Park Kultury metro station is next to the property;

♦ The property is suitable for the use of medium-sized companies as single occupiers as well as for smaller companies leasing office space floor by floor.

♦ Congested traffic on the Garden Ring in the rush hours.


Opportunities Threats ♦ According to the Moscow major no

new office developments will be allowed in the city center of Moscow. However, already in the past it was difficult to receive permission for construction of new buildings with an area over 5,000 m² in the city center of Moscow.

♦ The property is currently over-rented;

♦ Congested traffic may have a negative impact to the demand;

♦ Current unstable situation on the financial market.

Risks relating to the property Location 5.1 The subject property is located in the Central Administration District at 11A Zubovsky

Boulevard (Garden Ring). This area has a high level of attractiveness for office tenants.

Condition 5.2 Based on our inspection we do not think the property requires any significant forthcoming capital expenditures.

Legal title 5.3 Any legal title issues are matters which should be referred to your legal advisers.

Income risks Tenant covenant 5.4 Due to the location and quality of the buildings we estimate high quality of tenants

interested in renting space in the property. Thus, risks of tenants’ default may be considered to be low.

Cashflow 5.5 The premises may be leased on long-term bases which would guarantee long-term stable cash flow.

Reletting 5.6 Due to the current demand for quality office space the risk of reletting the premises is low.

Void costs 5.7 As a result of stable cash flow and low reletting uncertainty the void costs tend to decrease which also means lower expenses for agent’s rewarding.

Economic & property market risks Currency exchange uncertainty

5.8 Our valuation is partially based on the USD denominated lease agreement. However, in medium and long term the value of the asset is influenced by Russian currency economic environment. Moreover dramatic changes in the exchange rate may trigger USD rent payment changes in the existing lease agreement to fit changed reality.

Therefore our valuation should not be construed as a fully USD based valuation only but as a valuation of the asset on 31 December 2012 performed in dollars for continence purposes since the existing lease agreement is USD denominated.

Market 5.9 We refer to the RICS Valuation – Professional Standards; Guidance Note 1 (Valuation certainty). Investor sentiment towards property investment has weakened


uncertainty over the past months. Far fewer negotiations are resulting in transactions as many investors wait to see how market pricing will ultimately adjust to changing economic and restrictive credit conditions. In consequence, there are a limited number of comparable transactions. You should note that our opinion of Market Value is provided in light of these conditions. Accordingly, given the current economic and property market volatility, we recommend that the valuation is kept under regular review.

Supply of similar properties

5.10 The Class A Morozov Business Center (Phase II), located at 11/8D Timura Frunze Street is currently under construction (total area 22,000 m²). The end of construction is planned for Q2/ Q3 2013.

Availability of finance

5.11 The shortage of bank financing, especially for developments and from Western banks, is still felt in the current real estate market.

Liquidity of the property type/ Time to sell

5.12 We assume it would take from 26 to 40 weeks to dispose of the subject property with the support of the professional assistance of a property consultant or 16 to 24 weeks if or once a Buyer has been identified and the main commercial terms have been agreed upon in a Letter of Intent.

Valuation risks Quality/ quantity of comparables

5.13 Our comparables demonstrate asking prices which are not that evident as completed transactions. Thus, we have to apply additional adjustment to reflect possible decrease in price during negotiations between tenant/ buyer and lessor/ seller.

Assumptions & special assumptions

5.14 We have valued the subject property under the assumption that a good and marketable title and that all documentation is properly drawn.

Methodology 5.15 Our valuation has been undertaken using appropriate valuation methodology and our professional judgement.


Risks relating to the terms of the instruction Limited information

5.16 We have not been provided with a leasable area breakdown according to BOMA measurement standards. Since these measurement standards are common for lease negotiations for the Class A office segment, we have carried out our own estimation to derive a potential BOMA leasable area based on our professional experience. We recommend that our understanding of the leasable area is referred to a measurement specialist for confirmation that our understanding is correct.

Signature

Olga Kochetova MRICS Registered Valuer

Head of Valuation, Russia & CIS

Thomas Pflug MRICS Registered Valuer

Deputy Head of Valuation, Russia & CIS

For and on behalf of Knight Frank ZAO


Appendix 1 - General Terms of Business for Russian Valuations


These General Terms of Business comprise a part of our Terms of Engagement. The following General Terms of Business apply to all valuations and appraisals undertaken by Knight Frank ZAO unless specifically agreed otherwise in confirming instructions and so stated within the main body of the valuation report.

1. Knight Frank Russia ZAO Knight Frank, 26 Valovaya Street, Moscow, 115054, Russia.

2. Jurisdiction Russian law shall apply in every respect in relation to the valuation and the agreement with the client which shall be deemed to have been made in Russia. In the event of a dispute arising in connection with a valuation, unless expressly agreed otherwise in writing by Knight Frank ZAO, the client, and any third party using the valuation, will submit to the jurisdiction of the Russian Courts only. This will apply wherever the property or the client is located or the advice is provided.

3. Limitations on Liability 3.1 Our valuation is confidential to the party to whom it is addressed for the stated purpose and no liability is accepted to any third party for the whole or any part of its contents.

Liability will not subsequently be extended to any other party save on the basis of written and agreed instructions; this may incur an additional fee. Except as set out in 3.2 below the terms of the agreement between Knight Frank ZAO and the client are not enforceable by any third party.

3.2 The client agrees not to bring any claim arising out of or in connection with this agreement against any member, employee, partner or consultant of Knight Frank ZAO (each called a ‘Knight Frank Person’). Those individuals will not have a personal duty of care to the client and any such claim for losses must be brought against Knight Frank ZAO. Any Knight Frank Person may enforce this clause but the terms of our agreement may be varied by agreement between the client and Knight Frank ZAO at any time without the need for any Knight Frank Person to consent.

3.3 Our total liability to the client for any direct loss or damage caused by our negligence or breach of contract is limited to our fee specified in the Service Agreement. We do not accept liability for any indirect or consequential loss.

3.4 Nothing in these Terms of Business (or in our letter of engagement) shall exclude or limit our liability in respect of fraud or for death or personal injury caused by our negligence or for any other liability to the extent that such liability may not be excluded or limited as a matter of law.

4. Disclosure and Publication If our opinion of value is disclosed to persons other than the addressees of our report, the basis of valuation should be stated. Neither the whole or any part of the valuation report nor any reference thereto may be included in any published document, circular or statement nor published in any way whatsoever whether in hard copy or electronically (including on any web-site) without our prior written approval of the form and context in which it may appear.

5. Complaints Procedure If you have any concerns about our service, please raise them in the first instance with the valuer concerned. If this does not result in a satisfactory resolution, please contact the relevant Head of Department. As required by RICS, we will send you a copy of our Complaints Procedure on request.

6. Our Fees 6.1 We reserve the right to charge interest on the fees unpaid 30 days after the date of the invoice, in accordance with the effective legislation of the Russian Federation from

the date of the invoice until payment is made.

6.2 If you end this instruction at any stage, we will charge abortive fees on the basis of reasonable time and expenses incurred.

6.3 Where the valuation is for loan security purposes, and we agree to accept payment of our fee from the borrower, the fee remains due from yourselves until payment is received by us. Additionally, payment of our fee is not conditional upon the loan being drawn down or any conditions of the loan being met.

7. Disclosable Interests We may offer the following services to prospective purchasers and similarly the services may be offered to them by another organisation in circumstances where we may benefit financially: financial services, property letting and management services, building construction, refurbishment and maintenance services and the sale of the prospective purchaser’s property.

8. RICS Valuation – Professional Standards - "The Red Book" Valuations and appraisals will be carried out in accordance with the RICS Valuation – Professional Standards (March 2012) Global and UK edition ("The Red Book"), by valuers who conform to its requirements and with regard to relevant statutes or regulations. Compliance with The Red Book is mandatory for Chartered Surveyors in the interests of maintaining high standards of service and for the protection of clients.


9. Monitoring The valuation may be subject to monitoring under the RICS conduct and disciplinary regulations.

10. Valuation Basis Valuations and appraisals are carried out on a basis appropriate to the purpose for which they are intended and in accordance with the relevant definitions, commentary and assumptions contained in The Red Book. The basis of valuation will be agreed with you in the letter covering the specific terms for the instruction.

11. Portfolios Where requested to value a portfolio, unless specifically agreed with you otherwise, we will value the individual properties separately, upon the assumption that the properties have been marketed in an orderly manner.

12. Land Register Inspection and Searches We do not undertake searches or inspections of any kind (including web based searches) for title or price paid information in any publicly available land registers.

13. Title and Burdens We do not read documents of title although, where provided, we consider and take account of matters referred to in solicitor’s reports or certificates of title. We would normally assume, unless specifically informed and stated otherwise, that each property has good and marketable title and that all documentation is satisfactorily drawn and that there are no unusual outgoings, planning proposals, onerous restrictions or local authority intentions which affect the property, nor any material litigation pending.

14. Disposal Costs and Liabilities No allowance is made in our valuation for expenses of realisation or for taxation which may arise in the event of a disposal and our valuation is expressed as exclusive of any VAT that may become chargeable. Properties are valued disregarding any mortgages or other charges.

15. Sources of Information We rely upon the information provided to us, by the sources listed, as to details of tenure and tenancies (subject to 'Leases' below), planning consents and other relevant matters, as summarised in our report. We assume that this information is complete and correct.

16. Identity of Property to be Valued We will exercise reasonable care and skill (but will not have an absolute obligation to you) to ensure that the property, identified by the property address in your instructions, is the property inspected by us and contained within our valuation report. If there is ambiguity as to the property address, or the extent of the property to be valued, this should be drawn to our attention in your instructions or immediately upon receipt of our report.

17. Boundaries Plans accompanying reports are for identification purposes only and should not be relied upon to define boundaries, title or easements. The extent of the site is outlined in accordance with information given to us and/or our understanding of the boundaries.

18. Planning, Highway and Other Statutory Regulations Enquiries of the relevant Planning and Highways Authorities in respect of matters affecting the property, where considered appropriate, are normally only obtained verbally or from a Local Authority web site, and this information is given to us, and accepted by us, on the basis that it should not be relied upon. Written enquiries can take several weeks for response and incur charges. Where reassurance is required on planning matters, we recommend that formal written enquiries should be undertaken by the client’s solicitors who should also confirm the position with regard to any legal matters referred to in our report. We assume that properties have been constructed, or are being constructed, and are occupied or used in accordance with the appropriate consents and that there are no outstanding statutory notices.

We assume that the premises comply with all relevant statutory requirements including fire and building regulations.

19. Property Insurance Our valuation assumes that the property would, in all respects, be insurable against all usual risks including terrorism, flooding and rising water table at normal, commercially acceptable premiums.

20. Building Areas and Age Where so instructed, areas provided from a quoted source will be relied upon. Where the age of the building is estimated, this is for guidance only.

21. Structural Condition Building, structural and ground condition surveys are detailed investigations of the building, the structure, technical services and ground and soil conditions undertaken by specialist building surveyors or engineers and fall outside the normal remit of a valuation. Since we will not have carried out any of these investigations, except where separately instructed to do so, we are unable to report that the property is free of any structural fault, rot, infestation or defects of any other nature, including inherent weaknesses due to the use in construction of deleterious materials. We do reflect the contents of any building survey report referred


to us or any defects or items of disrepair of which we are advised or which we note during the course of our valuation inspections but otherwise assume properties to be free from defect.

22. Ground Conditions We assume there to be no unidentified adverse ground or soil conditions and that the load bearing qualities of the sites of each property are sufficient to support the building constructed or to be constructed thereon.

23. Environmental Issues Investigations into environmental matters would usually be commissioned of suitably qualified environmental specialists by most responsible purchasers of higher value properties or where there was any reason to suspect contamination or a potential future liability. Furthermore, such investigation would be pursued to the point at which any inherent risk was identified and quantified before a purchase proceeded. Anyone averse to risk is strongly recommended to have a proper environmental investigation undertaken and, besides, a favourable report may be of assistance to any future sale of the property. Where we are provided with the conclusive results of such investigations, on which we are instructed to rely, these will be reflected in our valuations with reference to the source and nature of the enquiries. We would endeavour to point out any obvious indications or occurrences known to us of harmful contamination encountered during the course of our valuation enquiries.

We are not, however, environmental specialists and therefore we do not carry out any scientific investigations of sites or buildings to establish the existence or otherwise of any environmental contamination, nor do we undertake searches of public archives to seek evidence of past activities which might identify potential for contamination. In the absence of appropriate investigations and where there is no apparent reason to suspect potential for contamination, our valuation will be on the assumption that the property is unaffected. Where contamination is suspected or confirmed, but adequate investigation has not been carried out and made available to us, then the valuation will be qualified by reference to appropriate sections of The Red Book.

24. Leases The client should confirm to us in writing if they require us to read leases. Where we do read leases reliance must not be placed on our interpretation of these documents without reference to solicitors, particularly where purchase or lending against the security of a property is involved.

25. Covenant We reflect our general appreciation of potential purchasers' likely perceptions of the financial status of tenants. We do not, however, carry out detailed investigations as to the financial standing of the tenants, except where specifically instructed, and assume, unless informed otherwise, that in all cases there are no significant arrears of payment and that they are capable of meeting their obligations under the terms of leases and agreements.

26. Loan Security Where instructed to comment on the suitability of property as a loan security we are only able to comment on any inherent property risk. Determination of the degree and adequacy of capital and income cover for loans is the responsibility of the lender having regard to the terms of the loan.

27. Build Cost Information Where our instruction requires us to have regard to build cost information, for example in the valuation of properties with development potential, we strongly recommend that you supply us with build cost and other relevant information prepared by a suitably qualified construction cost professional, such as a quantity surveyor. We do not hold ourselves out to have expertise in assessing build costs and any property valuation advice provided by us will be stated to have been arrived at in reliance upon the build cost information supplied to us by you. In the absence of any build cost information supplied to us, we may have regard to published build cost information. There are severe limitations on the accuracy of build costs applied by this approach and professional advice on the build costs should be sought by you. The reliance which can be placed upon our advice in these circumstances is severely restricted. If you subsequently obtain specialist build cost advice, we recommend that we are instructed to review our advice.

28. Reinstatement Assessments A reinstatement assessment for insurance purposes is a specialist service and we recommend that separate instructions are issued for this specific purpose. If advice is required as a check against the adequacy of existing cover this should be specified as part of the initial instruction. Any indication given is provided only for guidance and must not be relied upon as the basis for insurance cover. Our reinstatement assessment should be compared with the owner’s and if there is a material difference, then a full reinstatement valuation should be considered.

29. Comparable Evidence Where comparable evidence information is included in our report, this information is often based upon our oral enquiries and its accuracy cannot always be assured, or may be subject to undertakings as to confidentiality. However, such information would only be referred to where we had reason to believe its general accuracy or where it was in accordance with expectation. In addition, we have not inspected comparable properties.


Valuation Bases

Market value (MV):

Valuations based on Market Value shall adopt the definition, and the conceptual framework, settled by the International Valuation Standards Committee.

Market Value is defined as:

The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

Market rent (MR):

Market Rent is defined as:

The estimated amount for which a property would be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

1. Projected Market Value (PMV) of Residential Property only Projected Market Value is designed to provide residential mortgage lenders with a simple numeric indication of the valuer’s opinion of short-term market trends and is defined as:

The estimated amount for which a property is expected to exchange at a date, after the valuation date and specified by the valuer, between a willing buyer and a willing seller, in an arm’s-length transaction, after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

Regulated Purpose Valuations (RPV)

RICS has established particular requirements in circumstances where a valuation although provided for a client may also be of use to third parties, for instance, the shareholders in a company, defined by the RICS as “Regulated Purpose Valuations”. Where a valuation is for a Regulated Purpose, in accordance with RICS requirements, Knight Frank ZAO shall state the following in its report:

(a) The length of time the valuer has continuously been the signatory to valuations provided to the client for the same purpose as the Report, together with the length of time Knight Frank ZAO has continuously been carrying out the valuation instruction for the client.

(b) The extent and duration of the relationship of Knight Frank ZAO with the client.

(c) In relation to Knight Frank ZAO’s preceding financial year the proportion of the total fees, if any, payable by the client to the total fee income of Knight Frank ZAO expressed as one of the following:

Less than 5% ; or If more than 5%, an indication of the proportion within a range of 5 percentage points.

(d) Where, since the end of the last financial year, it is anticipated that there will be a material increase in the proportion of the fees payable, or likely to be payable, then we shall include a further statement to that effect in addition to (c) above.

When instructed in a continuing role as a Valuer it is Knight Frank ZAO’s policy to rotate persons responsible for valuations and the signatory to the report, on a seven yearly basis, unless specifically agreed otherwise.


Appendix 2 - About Knight Frank


Brief history of Knight Frank

Knight Frank was established in London in 1896 as a private and independent Partnership. At present, together with Newmark, its strategic partner, Knight Frank has a network of 196 offices in 38 countries and employs 6,700 specialists.

For 13 years of working in Russia Knight Frank became one of the leading companies in the CIS in the field of the commercial and residential real estate agency, strategic consulting and valuation. Our market knowledge and experience is shaped by a multidisciplinary team in commercial and residential departments of Knight Frank. In 2006 Knight Frank has launched the Ukrainian office in Kyiv.

Knight Frank Moscow Range of Services

Knight Frank Russia offers a complete portfolio of agency and consultancy services, including commercial sales, site acquisition, planning, development finance and consultancy, lettings and relocations, valuations and investment sales.

The company is active in office, retail, residential and industrial market sectors.

Knight Frank is synonymous with service quality. Our commitment to high and consistent standards of service across all our offices is reflected in exceptional levels of repeat business and Client referrals.

Valuation Services

Knight Frank worldwide values more than USD 260 billion worth of land and property every year. It is active around the globe and delivers consistent standards because of strict and control procedures.

The objective of valuation team is to provide Clients with a standardized high quality service from country to country with reporting formats, cash flow analysis and informed market commentary designed to meet their specific requirements and internationally recognized valuation standards such as the RICS Standards ("The Red Book") and the International Valuation Standards (IVS).

We respect confidentiality. Our Clients say what makes us special is that they trust us – and trust is quite an issue in the property world. We appreciate our Clients’ trust and guarantee confidentiality to any information the Clients give/render us.


Valuation Standards

● National Valuation Standards (FVS №1, №2, №3 and №4);

● RICS Valuation Standards (Red Book);

● International Valuation Standards (IVS).

In each report we provide a full list of valuation considerations and valuation assumptions, as well as data on market comparables etc. The report is supplied with annexes with copies of property titles, floor plans, land lease agreements etc. We also provide our Clients with copies of valuation certificates, proving qualification of valuers, short market research, site maps and colour photos of the property.

Our research and analytical work will be based upon our extensive in-house database and in-depth knowledge of the Russian market development. Our long-term and proven contacts with major market players, both property owners and users, provide us with up-to-date information on the real estate market.

Core Valuation Services

Our core valuation services:

● Market Value Appraisal/Valuation Report on different types of properties (office, retail, warehouse, residential, development land);

● Market Value Appraisal/Valuation Report for multiple purposes (auditing, refinancing, mortgage, sale/purchase, etc.);

● Highest and Best Use Analysis;

● Rental Value Analysis.

Purpose of Valuation

● Attraction of external financing;

● Auditing;

● Preparation of annual reports;

● Emission of securities;

● Insurance;

● Sale-purchase;

● Rent deals;

● Managerial decisions.


Appendix 3 - Location plans


Image: Regional plan


Image: Location plan


Appendix 4 - Valuation calculations


Calculation – Income Capitalization Approach

REPORT Valuation Summary Knight Frank Russia

Valuation Date 31 December 2012

Portfolio

Name Dom Park Kultury_December 2012

Gross Valuation $83,892,701

Capital Costs $0

Net Valuation $83,892,701

Say, $83,893,000

Equivalent Yield 9.47%

Initial Yield 9.64%

Reversion Yield 7.78%

Running Yields based on @$83,892,701

Date Net Rent Annual

31.Dec.12 $8,088,430 9.64%

14.Nov.13 $8,343,335 9.95%

14.Nov.14 $8,606,581 10.26%

14.Nov.15 $8,888,208 10.59%

14.Nov.16 $9,245,578 11.02%

14.Nov.17 $8,169,099 9.74%

14.Nov.18 $8,557,481 10.20%

14.Nov.19 $8,962,472 10.68%

14.Nov.20 $9,328,567 11.12%

14.Nov.21 $0 0.00%

14.May.22 $6,526,440 7.78%

Property Net Rent ERV Gross Value Net Value Eq Yld Init Yld Revn Yld Dom Park Kultury $8,088,430 $6,526,440 $83,892,701 $83,892,701 9.47% 9.64% 7.78%

Total $8,088,430 $6,526,440 $83,892,701 $83,892,701

CIRCLE VISUAL INVESTOR 2.04.009

PRIVATE & CONFIDENTIAL

www.dtz.com

DTZ (IMS Project Management LLC) Lesnaya Plaza BC Office 405, 4th floor, bld. 4, 4th Lesnoy Lane, Moscow 125047, Russia 18 March 2013

Job No: 12THL329

Report and Valuation 12THL329 as at 31 December 2012 Prepared on behalf of Traore Holdings Limited (Cyprus) In respect of:

Development Land at 22, Barbolina Street, the Sokolniki District, Moscow, Russia

Traore Holdings Limited (Cyprus) Development site at 22 Barbolina Street, Moscow, RF

Date of Report: 18 March 2013 Valuation date: 31 December 2012

Commercial Report – Single Property

Contents 1.0 INTRODUCTION 6

2.0 COMPLIANCE WITH RICS VALUATION - PROFESSIONAL STANDARDS, MARCH 2012 6

3.0 STATUS OF VALUER AND CONFLICTS OF INTEREST 6

4.0 PURPOSE OF THE VALUATION 7

5.0 DISCLOSURES REQUIRED UNDER THE PROVISIONS OF VS 1.9 7

5.1 NAME OF SIGNATORY 7

5.2 DTZ'S RELATIONSHIP WITH CLIENT 7

5.3 FEE INCOME FROM THE CLIENT 7

5.4 REPORT FORMAT 7

6.0 BASIS OF VALUATION 8

6.1 MARKET VALUE 8

6.2 TAXATION AND COSTS 8

7.0 VAT 8

8.0 ASSUMPTIONS AND SOURCES OF INFORMATION 8

8.1 TITLE 9

8.2 CONDITION OF STRUCTURE AND SERVICES, DELETERIOUS MATERIALS, PLANT & MACHINERY & GOODWILL 9

8.3 ENVIRONMENTAL MATTERS 10

8.4 AREAS 11

8.5 STATUTORY REQUIREMENTS AND PLANNING 11

8.6 INFORMATION 12

9.0 VALUATION 12

10.0 DISCLOSURE AND CONFIDENTIALITY 13

11.0 PROPERTY DESCRIPTION 14

11.1 PROPERTY ADDRESS 14

11.2 INSPECTION 14

11.3 LOCATION AND SITUATION 14

11.4 DESCRIPTION 16

11.5 UTILITIES 16

11.6 PROPOSED DEVELOPMENT SCHEME 16

11.7 CONDITION 17

11.8 PLANNING 17

11.9 TENURE 18

11.10 VAT IN RESIDENTIAL DEVELOPMENT 19

12.0 MARKET OVERVIEWS 20

12.1 RUSSIAN ECONOMY OVERVIEW 20

12.2 OVERVIEW OF THE MOSCOW NEW-BUILD BUSINESS CLASS RESIDENTIAL MARKET, 2012 23

13.0 VALUATION 25

13.1 VALUATION CONSIDERATIONS 25

13.2 VALUATION APPROACH 25




13.2.1 DETERMINATION OF DEVELOPMENT COSTS 27

13.2.2 REVENUE CASH FLOW OF THE PROPOSED SCHEME 30

14.0 FINAL VALUE ESTIMATION 40

15.0 DEFINITIONS OF BASES OF VALUATIONS 41

15.1 MARKET VALUE 41

Appendices

A – Comparable evidence for residential space

B – Assessment of the Market Value of the Propery applying the residual approach

Traore Holdings Limited (Cyprus) Development Land at 22, Barbolina Street,

Moscow, Russia Date of valuation 31 December 2012

Date of report 16 March 2013

Page 4 of 47

Property address 22, Barbolina Street, the Sokolniki District, Moscow

Location

The Property is located in the Eastern Administrative District of Moscow, in

the Sokolniki District, circa 1.5 km outside the Third Transport Ring Road. It is

approximately 0.8 km to the south-east of Sokolniki Park and 0.45 km to the

south-east of Sokolnicheskaya Square, the district’s busiest retail spot and

transport hub.

The Property is situated on Barbolina Street, in the quadrant formed by

Barbolina Street and the 2nd

and 3rd

Sadovnicheskaya Streets. This quadrant is

a quiet neighbourhood comprised of predominantly residential uses with

complimentary social amenities. The residential uses are mostly mass market,

a mixture of five-story buildings of brick construction and high-rise residential

blocks of reinforced concrete panel construction. The only business-class

residential scheme in proximity to the Property, the Dom v Sokolnikakh

residential complex, was completed by Donstroi (2009) on Rousakovskaya

Street.

The Property benefits from good vehicular accessibility. The key arterial

routes of the district – Rousakovskaya Street/ Stromynka Street and Gastello

Street/ Zhebrunova Street are within 0.3 km and 0.5 km to the north and

south of the property respectively. Rousakovskaya Street provides direct

access to the Third Transport Ring, after changing into Krasnoprudnaya Street

to Moscow’s centre; and to the MKAD, transforming en-route into

Stchelkovskoye Highway. Gastello Street, which runs parallel to Barbolina

Street where the Subject Property is situated, links the property with the

areas beyond the Yauza River, in the Preobrazhensky and Sokolinaya Gora

Districts of Moscow, in the north-east and south-east respectively.

The nearest metro station, Sokolniki, is 0.45 km to the north-west of the

Property. Several bus, trolleybus and tramway services operate along Gastello

and Rousakovskaya Streets. On the whole, the existing public transport

system is very efficient within the district providing accessibility to all its parts.

Property type Development land

Total area, sq m 1,851

Land category and permitted use Settlement land currently permitted for retail uses

Tenure

The Property is held leasehold by Tinor Maxi LLC in accordance with Lease

Agreement M-03-508853 dated January 26, 2010. The lease was prolonged in

2011 for an undetermined period as certified by the Letter of the local branch of

the Department of the Moscow Land Resources of January 24, 2011.




Page 5 of 47

Proposed Scheme

The proposed development scheme comprises a fourteen-storey multi-

dwelling residential building extending to 13,500 sq m of GBA. The scheme

will provide 47 flats, commercial space on the semi-basement, ground and

first floors, and underground parking for 92 car spaces. The flats and

apartments occupying floors 3-14 of the building will provide 6,715 sq m of

net sellable business-class residential accommodation. The commercial

(retail) space will extend to 1,589 sq m of net sellable area.

Market Value as at the valuation date,

December 31, 2012 $11,874,000 (Eleven Million, Eight Hundred and Seventy Four US Dollars)

Key valuation considerations

Established residential location in an ecologically friendly north-eastern district of Moscow, within 1 km of Sokolniki

Park;

Situation in a quiet neighbourhood albeit within 0.45 km to the district’s busiest square where varied social, retail,

leisure and transport amenities are concentrated;

Easy and convenient commute to both the city centre and the MKAD;

High probability of obtaining planning permission to build above 35 metres;

The proposed scheme is to be built to a high standard and specification of construction meeting the requirements

for modern business class residential schemes, with parking provision of 2 car spaces per flat;

A large commercial component comprising three levels of the proposed building;

Increasing demand for business-class residential accommodation in Moscow;

Anticipated low competition for the proposed scheme as there is high probability that no residential development

will commence in 2013-2014 in the Property’s locale.




Page 6 of 47

Mr Theodorus Michael and Ms Maria Pasiou Tsiakka

Members of the Board of Directors

Traore Holdings Limited (Cyprus)

36 Ayias Elenis Street,

Galaxias Commercial Center,

4th Floor, Office 403, CY-1061 Nicosia, Cyprus

P.O. Box 22283, CY-1519 Nicosia, Cyprus

Email: [email protected]

Tel: +7 495 748 1111

Our ref: 12THL329

March 16, 2013

Dear Madam, Sir,

Property: Development Land with a total area of 1,851 sq m at 22, Barbolina Street,

the Sokolniki District, Moscow

1.0 Introduction In accordance with your instructions, which were confirmed in Consultancy Agreement 12THL329 dated December 29, 2012, signed between Traore Holdings Limited (Cyprus) (“the Client”) and IMS Project Management LLC (“DTZ”), we have provided our opinion of the Market Value of the leasehold interest in the Property and described in detail in Section 11 of this Report, as at December 31, 2012.

2.0 Compliance with RICS Valuation - Professional Standards, March 2012 We confirm that the valuation has been prepared in accordance with the appropriate sections of the Valuation Standards ("VS") contained within RICS Valuation - Professional Standards 2012, (the "Red Book").

3.0 Status of valuer and conflicts of interest We confirm that we have sufficient current knowledge of the relevant markets, and the skills and understanding to undertake the valuation competently. We also confirm that where more than one valuer has contributed to the valuation the requirements of VS 1.6.4 of the Red Book have been satisfied. We confirm that Alyona Neplyueva MRICS has overall responsibility for the valuation. Finally, we confirm that we have undertaken the valuation acting as External Valuers, qualified for the purpose of the valuation. We further confirm that we have previously undertaken valuations for Traore Holdings Limited (Cyprus), the Client, including a previous valuation of the Property. This report and re-valuation is required for the Client’s internal purposes, for the IFRS reporting to be audited by KPMG (Cyprus), for the submission to the Client's




Page 7 of 47

shareholders, its ultimate shareholders and finance support and we do not foresee any conflict in preparing the advice requested arising from any previous involvement.

4.0 Purpose of the valuation

We understand that the valuation is required for the Client’s internal purposes, for the IFRS reporting to be audited by KPMG (Cyprus), for the submission to the Client's shareholders, its ultimate shareholders and finance support. In accordance with VS 1.9 we have made certain disclosures in connection with this valuation instruction and our relationship with the Client. These are included in Section 5 below.

5.0 Disclosures required under the provisions of VS 1.9

5.1 NAME OF SIGNATORY

Alyona Neplyueva MRICS has been the signatory of valuation reports provided to the Client for the same purpose as the purpose of this Report for a continuous period since December 31, 2011. DTZ has been carrying out this valuation instruction for the Client for a continuous period since December 31, 2009.

5.2 DTZ'S RELATIONSHIP WITH CLIENT

In addition to regular annual revaluations of the Property (since December 31, 2009 to date), DTZ receives regular re-valuation instructions from the Client in respect of another real estate property in Moscow.

5.3 FEE INCOME FROM THE CLIENT

IMS Project Management LLC is the exclusive franchisee of DTZ Debenham Tie Leung in the Russian Federation and Kazakhstan. In UGL's financial year ending 30 June 2012, the proportion of fees payable by the Client to the total fee income of UGL was less than 5%.

5.4 REPORT FORMAT

The Report and Appendices hereto comprise a detailed description of the Property and our valuation. The Report also contains maps demonstrating the location and situation of the Property relevant for the valuation, which are provided for illustrative purposes only. If verification of the accuracy of the maps is required, this should be referred to your solicitors.




Page 8 of 47

6.0 Basis of valuation Our opinion of the Market Value of the Property has been primarily derived using the asking prices for comparable properties, market information prevailing at the date of valuation, and the expert opinion of our research and agency teams who have advised us on the current market levels.

6.1 MARKET VALUE

The value of the Property has been assessed in accordance with the relevant parts of the current RICS Valuation - Professional Standards 2012. In particular, we have assessed Market Value in accordance with VS 3.2. Under these provisions, the term "Market Value" means "The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.". In undertaking our valuation on the basis of Market Value, we have applied the conceptual framework which has been settled by the International Valuation Standards Council and which is set out in paragraphs 31-35 of the IVS Framework.

6.2 TAXATION AND COSTS

We have not made any adjustment to reflect any liability to taxation that may arise on disposal, nor for any costs associated with disposal incurred by the owner. No allowance has been made to reflect any liability to repay any government or other grants or taxation allowance that may arise on disposal. We have made a deduction to reflect a purchaser's acquisition costs.

7.0 VAT The capital valuation included in this Valuation Report is net of value added tax at the prevailing rate.

8.0 Assumptions and sources of information An Assumption is stated in the Glossary to the Red Book to be a "supposition taken to be true" ("Assumption"). In this context, Assumptions are facts, conditions or situations affecting the subject of, or approach to, a valuation that, by agreement, need not be verified by a valuer as part of the valuation process. In undertaking our valuation, we have made a number of Assumptions and have relied on certain sources of information. Where appropriate, the Client has confirmed that our Assumptions are correct so far as




Page 9 of 47

they are aware. In the event that any of these Assumptions prove to be incorrect then our valuation should be reviewed. The Assumptions we have made for the purposes of our valuation(s) are referred to below:

8.1 TITLE

Save as disclosed in the Certificates of Title in respect of the Property provided by Client (please see Section 12.6 ‘Tenure’ of this Valuation Report for details), we have made an Assumption that the Client is possessed of good and marketable leasehold title and that the property is free from rights of way or easements, restrictive covenants, disputes or onerous or unusual outgoings. We have also assumed that the property is free from mortgages, charges or other encumbrances. Legal issues, and in particular the interpretation of matters relating to title and leases, may have a significant bearing on the value of an interest in property. No responsibility or liability will be accepted for the true interpretation of the legal position of our client or other parties. Where we express an opinion upon legal issues affecting the valuation, then such opinion should be subject to verification by the client with a suitable qualified lawyer. In these circumstances, we accept no responsibility or liability for the true interpretation of the legal position of the client or other parties in respect of the valuation of the property.

8.2 CONDITION OF STRUCTURE AND SERVICES, DELETERIOUS MATERIALS, PLANT & MACHINERY & GOODWILL

The Property is a land site earmarked for residential development. The future development according to the information provided by the Client will correspond to business class residential accommodation in terms of its specification and characteristics. Development is yet to commence as at the valuation date. We have made the Assumption that the proposed scheme will conform to business class residential accommodation in terms of its specification and characteristics. Our valuation is based on the Assumption that the completed building will also satisfy the various matters discussed below. The non-completed building present at the subject site was built in the early-middle 2000s; therefore we have made the Assumption that during its construction none of the deleterious materials (calcium chloride, asbestos, high alumina cement concrete, lead, urea formaldehyde foam, glass-reinforced concrete, calcium silicate bricks, slip bricks or any other substance or method of use generally known at the time of specification to be deleterious to health and safety or to the integrity of buildings and/or other structures) were used. For the




Page 10 of 47

purposes of this valuation, we have made an Assumption that any such investigation would not reveal the presence of such materials in any adverse condition. We have also assumed that during the future construction works none of the deleterious and harmful materials will be used. Our valuation is based on the Assumption that the proposed scheme will not contain any deleterious materials. No mining, geological or other investigations have been undertaken to certify that the site is free from any defect as to foundations. We have made an Assumption that the load bearing qualities of the site of the property are sufficient to support the building constructed thereon. We have also made an Assumption that there are no services on, or crossing the site in a position which would inhibit development or make it unduly expensive and that there are no abnormal ground conditions, nor archaeological remains present, which might adversely affect the present or future occupation, development or value of the property. No tests have been carried out as to electrical, electronic, heating, plant and machinery, equipment or any other services nor have the drains been tested. However, we have made an Assumption that all services, including gas, water, electricity and sewerage, are provided and are functioning satisfactorily.

No allowance has been made in this valuation for any items of plant or machinery not forming part of the service installations of the building. We have specifically excluded all items of plant, machinery and equipment installed wholly or primarily in connection with the occupants' businesses. We have also excluded furniture and furnishings, fixtures, fittings, vehicles, stock and loose tools. Further, no account has been taken in our valuation of any business goodwill that may arise from the present occupation of the property. It is a condition of DTZ or any related company, or any qualified employee, providing advice and opinions as to value, that the client and/or third parties (whether notified to us or not) accept that the Valuation Report in no way relates to, or gives warranties as to, the condition of the structure, foundations, soil and services.

8.3 ENVIRONMENTAL MATTERS

We have been instructed not to make any investigations in relation to the presence or potential presence of contamination in land or the building, and to make an Assumption that if investigations were made to an appropriate extent then nothing would be discovered sufficient to affect value. We have not carried out any investigation into past uses, either of the property or any adjacent land to establish whether there is any potential for contamination from such uses or sites, and have therefore made an Assumption that none exists. In practice, purchasers in the property market do require knowledge about contamination. A prudent purchaser of this property may require appropriate investigations to be made to




Page 11 of 47

assess any risk before completing a transaction. Should it be established that contamination does exist, this might reduce the value now reported.

Flooding

We have been instructed not to make enquiries as to whether the subject land plot lies in a flood plane or an area with a history of flooding, but would advise the client to commission a thorough Environmental Survey conducted by a professional environmental consultancy, should further professional advice be required in this respect. We have made the Assumption that the Property does not currently, nor will, suffer from any potential environmental hazard, including flooding. Should this assumption be disproven, the value reported herein may be detrimentally or adversely affected.

8.4 AREAS

We have not been instructed to measure, calculate or verify the area of the subject site or the floor areas of the proposed development scheme relevant to our valuation which the Client has provided us. As instructed, we have relied on these areas and have not checked them on site. We have made an Assumption that the areas supplied to us are correct and valid as of the valuation date. The Property comprises a brown-field, flat land plot of rectangular configuration with a primary frontage onto Barbolina Street. At present a capital structure - a non-completed retail centre is present at the site. In our valuation we have utilised the total area of the subject site of 1,851 sq m as provided in the Lease Agreement M-03-508853 dated January 26, 2010.

8.5 STATUTORY REQUIREMENTS AND PLANNING

We have not been instructed to and have not made any verbal or written enquiries of the relevant planning authority in whose area the property lies as to the possibility of highway proposals, comprehensive development schemes and other ancillary planning matters that could affect property values. We have made an Assumption that the proposed residential building will be constructed in full compliance with valid town planning and building regulations approvals. Similarly, we have also made an Assumption that the property is not subject to any outstanding statutory notices as to its construction, use or occupation. We have made a further Assumption that the existing use of the property is duly authorised or established and that no adverse planning condition or restriction applies.




Page 12 of 47

We would recommend that formal searches are made if more certain information is required. We assume that, if you should need to rely upon the information given about town planning matters, your solicitors would be instructed to institute such formal searches.

8.6 INFORMATION

We have made an Assumption that the information the Client and its professional adviser(s) have supplied to us in respect of the property is full, correct and valid as at the valuation date. It follows that we have made an Assumption that details of all matters likely to affect value within your/ their collective knowledge such as prospective lettings, rent reviews, outstanding requirements under legislation and planning decisions have been made available to us and that the information is up to date.

9.0 Valuation We are of the opinion that the Market Value as at December 31, 2012 of the leasehold interest in the subject land plot described in detail in Section 11 of this Valuation Report, subject to the Assumptions and comments in this Valuation Report and the Appendices hereto, and subject to minor rounding, is:-

$11,874,000 (Eleven Million, Eight Hundred and Seventy Four US Dollars)




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10.0 Disclosure and confidentiality The contents of this Valuation Report and Appendices are confidential to the party to whom they are addressed for the specific purpose to which they refer and are for their use only. Consequently, and in accordance with current practice, no responsibility is accepted to any other party in respect of the whole or any part of their contents. Before this Valuation Report, or any part thereof, is reproduced or referred to, in any document, circular or statement, and before its contents, or any part thereof, are disclosed orally or otherwise to a third party, the valuer's written approval as to the form and context of such publication or disclosure must first be obtained. Yours faithfully Alyona Neplyueva MRICS Director Head of Valuation For and on behalf of DTZIMS (IMS Project Management LLC)




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11.0 Property description

11.1 PROPERTY ADDRESS

The Property is located at 22, Barbolina Street, the Sokolniki District, Moscow, Russia.

11.2 INSPECTION

The Property was inspected externally by Aiza Digaeva, Junior Valuer, on March 15, 2013.

11.3 LOCATION AND SITUATION

The Subject Property is located in the Eastern Administrative District of Moscow, in the Sokolniki

District, circa 1.5 km outside the Third Transport Ring Road (the TTR) - to the north-east of it.

The Sokolniki District extends to 1,028.46 hectares in total area and has a population of 53,500 (Census 20101. The Sokolniki Park, the former Tsar's falcon hunting grounds, makes up most of its territory – 600 hectares. This environmentally preserved landscape coupled with the absence of polluting industrial plants, on the one hand, and the varied amenities available in the vicinity, on the other hand, have increased residential demand for the district.

The district has thirteen hospitals and polyclinics; nine schools, including the renowned European Gymnasium, over a dozen nurseries and kindergartens, and four libraries. Sokolniki is home to Roman Vikyuk’s theatre and the football and hockey clubs Spartak Moscow. The latter plays its games in the Sokolnini Sports Palace, located at the gates to the Sokolniki Park. The football club has a stadium on Stromynka Street. Sokolnicheskaya Square is the heart of the district, its busiest retail pitch and transport hub. Retail uses varying from kiosks and retail premises occupying the ground floors of residential uses, to modern shopping facilities such as the Russkoye Razdolye retail centre and the Alye Parusa supermarket which are concentrated there. Sokolniki metro station and the stops of the public transport routes that service the entire district are also located there. The Subject Property is circa 0.8 km to the south-east of Sokolniki Park and 0.45 km to the south-east of Sokolnicheskaya Square. It is situated on Barbolina Street, in the quadrant formed by Barbolina Street and the 2nd and 3rd Sadovnicheskaya Streets.

Roman Vikyuk’s theatre is within 0.6 km from the Subject Property, a few blocks from Spartak Moscow’s football stadium, on Stromynka Street. The European Gymnasium is a two minute walk, at 3, 3rd Sokolnicheskaya Street. Across Barbolina Street from the site is the Sokolniki hospital – a group of stone and brick-clad low-rise buildings which were built between 1899 and1905 according to Alexander Roop’s design and currently hosts the 7th Municipal Tuberculosis Hospital.

1 The Federal State Statistics Service at http://moscow.gks.ru/munstat/default.aspx.




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A few blocks up Barbolina Street from the Subejct Property is a fire station famous for its fire tower, the oldest in Moscow (1863). The Sokolniki Fire Tower - a landmark building overlooking Sokolnicheskaya Square – is currently out of use. This quadrant is a quiet suburb comprised of predominantly residential uses with complimentary social amenities. The residential uses are mostly mass market, a mixture of five-story buildings of brick construction and high-rise residential blocks of panel construction. The only business-class residential scheme in proximity to the Subject Property, the Dom v Sokolnikakh residential complex, was completed by Donstroi (2009) on Rousakovskaya Street. Dom v Sokolnikakh and the twenty-storey Holiday Inn Sokolniki Hotel, with their prominent facades onto the Sokolniki metro station and Sokolniki Square, currently dominate the area. Along with the Dom v Sokolnikakh scheme, a few more business-class residential uses have been built in Sokolniki – the Zhemchuzhina, Arco di Sole, and Na Yauze residential complexes. Those, however, are either to the north of the subject site, close to Sokolniki Park, or to the east, towards the Yauza River.

We are aware of the Moscow Government’s intention to reconstruct dilapidated housing on Malaya Ostroumoskaya Street, in the quadrant roughly between Stromynka Street and the Sokolniki Park (mirco-district 3-3a), circa 0.3 km to the north of the Subject Property. Circa 110,000 sq m of predominantly affordable (mass market) housing is planned for construction there by 2025. This development will provide a more homogeneous residential environment complementing the residential scheme planned for construction at the subject site. However, the master plan for this development has not yet been finalised and its completion is thus uncertain.

The Property benefits from good vehicular accessibility. The key arterial routes of the district – Rousakovskaya Street/ Stromynka Street and Gastello Street/ Zhebrunova Street are within 0.3 km and 0.5 km to the north and south of the property respectively. Rousakovskaya Street provides direct access to the Third Transport Ring, after changing into Krasnoprudnaya Street to Moscow’s centre; and to the MKAD, transforming en-route into Stchelkovskoye Highway. Gastello Street, which runs parallel to Barbolina Street where the Property is situated, links the property with the areas beyond the Yauza River, in the Preobrazhensky and Sokolinaya Gora Districts of Moscow, in the north-east and south-east respectively. The nearest metro station, Sokolniki, is 0.45 km from the property. Several bus, trolleybus and tramway services operate along Gastello and Rousakovskaya Streets. On the whole, the existing public transport system is very efficient within the district providing accessibility to all its parts.




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11.4 DESCRIPTION

The Property comprises a brown-field, flat land plot of rectangular configuration with a primary frontage onto Barbolina Street. The site extends to a total area of 1,851 sq m. The site is zoned as settlement land and is currently permitted for retail uses. As at the valuation date, a capital structure - a non-completed retail centre - was present at the site. The building is held freehold by the Client and is subject to demolition. The site is fenced with the developer’s temporary site office, which also provides 24/7 security, present at the site.

11.5 UTILITIES

We understand that the issue of utility provision has not been investigated in detail. No information as to the connection points to the municipal utilities, preliminary technical conditions, or required utility capacities has been supplied to us. However, since the Property is situated in the quadrant allocated for residential construction under the effective Land Use Master Plan of Moscow2, we have assumed that the completed proposed scheme will be provided with utilities in the required capacities.

11.6 PROPOSED DEVELOPMENT SCHEME

The Client has informed us of its intention to build a residential scheme on the subject site and has supplied us the current development prospectus outlining the preliminary area schedule and preliminary typical floor plan for the residential levels. The proposed development scheme comprises a fourteen-storey multi-dwelling residential building extending to 13,500 sq m of GBA. The scheme will provide 40 flats (floors 4-14) and 7 apartments (floor 3), commercial space on the semi-basement, ground and first floors, and underground parking for 92 car spaces. The flats and apartments occupying floors 3-14 of the building will provide 6,715 sq m of net sellable business-class residential accommodation. The commercial (retail) space will extend to 1,589 sq m of net sellable area.

The preliminary area schedule, as supplied by the Client, is summarised below:

Table 1. Area breakdown by use

Accommodation GBA, sq m Sellable area, sq m/ car spaces

TOTAL, including: 13,500 8,304

Residential and apartment space, sq m 7,651 6,715 (including terraces – 215 sq m)

Lobby, sq m 228 03

2 The Land Use Master Plan determines the permitted use(s) of a particular land plot. 3 The planned net area of the lobby is 175 sq m. This space, however, comprises common use areas and is not intended for sale.




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Commercial space, sq m 1,891 1,589

Parking space, sq m/ car spaces 3,730 92

Due to an early project stage, a detailed design has yet not been finalised for the scheme, consequently, we have not been provided with a detailed specification of the proposed scheme. We, however, understand that it will be built to a high specification appropriate for modern business class residential uses.

We are of the opinion that the subject site lends itself to residential uses due to its location in an established residential destination on the one hand, and the fact that the current demand for residential space, especially in the subject location, is higher than occupier demand for office and retail uses. According to the preliminary development schedule provided by the Client, the scheme will be constructed in one single phase over 24 months. We have assumed that construction will start on January 1, 2014 and be completed by January 1, 2016. Over the period between the valuation date and the planned construction commencement date, the necessary permitting and detailed design documentation is assumed to be obtained/ developed. Sales have been assumed to start simultaneously with construction commencement, on January 1, 2014, to be completed by July, 2017, two years after the planned commissioning of the scheme (assumed to take place on December 31, 2015). Both the residential and commercial accommodation will be marketed in the shell and core condition.

11.7 CONDITION

On the valuation date the subject site was fenced and a temporary on-site office was set up, but no construction activity had yet commenced at the site. Compliant with the Client’s instructions, our valuation is based on the Assumption that all works of design, construction and landscaping will be satisfactorily carried out in accordance with the building specification, the current Russian Building Standards, any relevant codes of practice and will comply with State and Local Legislation pertaining to construction, health and safety.

11.8 PLANNING

At present we are aware of two planning issues associated with the Property. In order to develop the proposed residential scheme, a change in the permitted use of the subject site to the construction of high-rise multi-dwelling residential uses is required. Nominally, in accordance with the title documents supplied by the Client, the subject site is currently permitted for retail uses. However, the site falls into Land Zone 11-120 that is designated for multi-use social amenity and residential construction according to the Master Plan of Moscow, which was approved by the State Duma in 2010. We, therefore, believe that there is a high likelihood that the required change in the current permitted use to that of the construction of multi-dwelling residential uses will be granted to the developer by the




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relevant authorities. In view of this we have made the Assumption that the permitted use of the Subject Property will be altered as described above. According to Cadastral Excerpt 77-ГК-/100-007/09-3-3, dated May 15, 2009, a copy of which has been supplied to us by the Client, the subject site is situated in the quadrant where height restrictions forbid construction of buildings exceeding 35 metres in height. However, the Master Plan of Moscow which was approved by the State Duma in Q1 2010, determines a maximum building height of 55 metres for the subject land plot. We, therefore, are of the opinion that the probability of the change in the height restrictions from 35 metres to 55 metres is high, due to which we have made the Assumption that the maximum building height will be increased as described above. In our valuation we have reflected the above planning risks in the discount rate. We further assume that the Property is not subject to any enforcement action and that there are no outstanding planning applications in respect of this Property.

We have not been provided any permitting documents in regard to the proposed scheme. It should be noted that should the Client fail to achieve the necessary consents and permissions the Market Value reported herein may be adversely affected.

11.9 TENURE

We have been provided with a copy of the Lease Agreement in respect of the subject land plot and the Letter from the local branch of the Department of the Land Resources of the Moscow City Government extending the lease for an undefinite time period. We understand that the Property is held leasehold and is free from restriction as to use, title or occupation other than as referred to below. Land plot Total area: 1,851 sq m Land category and permitted use: settlement land permitted for retail use Cadastral number: 77:03:003006:1002 Lease agreement: M-03-508853 dated January 26, 2010 and Letter dated January 24, 2011 from the local branch

of the Department of the Land Resources of the Moscow City Government

Lessor: Department of Land Resources of the Moscow City Government

Lessee: Tinor Maxi LLC Lease term: undetermined (extended until the current lease

agreement is terminated by the Parties) Ground rent (2013): RUB 1,257,357.74 ($ 41,397.63 ) Encumbrances: none




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Non-completed non-residential building: Total area: 89,850 sq m Location: Site 22, Barbolina Street, Moscow Certificate of freehold title: 77-АЖ 687927 dated March 13, 2009 Freeholder: Tinor Maxi LLC Encumbrances: none We understand that the subject land plot is held leasehold for an undetermined period. We have made the Assumption that the current lease will be in place during the the design and construction periods to complete the proposed residential scheme.

11.10 VAT IN RESIDENTIAL DEVELOPMENT

The capital valuations and market asking prices included in this Report are net of value added tax.

In relation to residential development, under the Tax Code of the Russian Federation, VAT paid by the developer on construction material and service costs, is included in development costs, before the residential project is completed and freehold title to it is registered. Off-plan sales and sales in the course of construction for residential space are not subject to VAT. Since October 1, 2010, the developer no longer has to pay VAT on the difference between revenue from off-plan sales of residential space including VAT and development costs with VAT. Sales of completed residential accommodation are normally not VAT taxable (which means that the purchaser of residential accommodation does not explicitly pay VAT). In this case the developer cannot fully reclaim the VAT loss accrued during construction, but can include this VAT implicitly into the sales price by respectively increasing the sale price. However, the Tax Code provides for a VAT option right in respect of sale of completed residential property. The developer may choose to charge VAT on the sale of a completed residential property, which allows the developer to reclaim the VAT loss accrued during construction. Such an option right must, however, be applied to all transactions on the sale of residential property for a period of at least one year. Based on the above we have assumed that the above VAT option right will be exercised by the Client or a third party investor/ developer and have factored in VAT on costs into our valuation calculations. This, however, is not applicable to the commercial element of residential schemes: the developer should pay VAT on the basis of the difference between income from commercial sales and all costs associated with its construction at the prevailing rate. Therefore, we have reflected such VAT deduction in our calculations.




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12.0 Market overviews

12.1 RUSSIAN ECONOMY OVERVIEW

According to the flash estimate, GDP rose by 2.9% on the year in Q3 2012, in line with our forecast. This would imply a seasonally and working-day adjusted (SWDA) quarterly expansion of around 0.6%, a significant improvement on Q2 2012 but still somewhat below trend.

Details on the expenditure breakdown are not yet available, but we expect consumer spending to have again acted as the main driver of growth, although retail sales data suggest a slightly diminished contribution compared to recent quarters. Elsewhere, we expect investment growth to have picked up following the resolution of political uncertainty linked to the elections – although fairly weak construction data suggest that this effect may be more limited that previously envisaged. Data available for Q4 2012 paint a mixed picture of economic activity; both the services and manufacturing PMI headline readings improved in October, the former to an 18-month high of 57.3. On the other hand, October SWDA industrial production disappointed significantly on the downside, falling 0.7% on the month. Elsewhere, labour market releases were broadly neutral, albeit the October unemployment rate was 1.1% points lower than a year earlier. Overall, the data are broadly consistent with our forecast that growth will remain stable in Q4 2012, implying full-year GDP growth of 3.4%. Looking ahead, we expect the recovery to be gradual, with growth picking up momentum slowly during the course of 2013. Moreover, we expect the profile of growth to change (compared with the past nine months). While consumer spending is set to remain the main driver of growth, we expect its contribution to diminish but with the slack offset by a pick-up in investment and an acceleration in inventory accumulation as business confidence improves. Our view that consumer spending growth is likely to slow next year is premised on the view that real earnings growth will fall back to a level more in line with fundamentals (despite slowing recently, to about 7% in Q3 2012, it remains well above labour productivity growth). In addition, we expect credit growth to be squeezed by the central bank’s recent measures to tighten liquidity, although this effect is likely to be of secondary importance. This anticipated pattern of easing strength in consumer spending is already apparent in the latest retail sales data, growth of which has slowed markedly over the last three months. However, we expect this to be offset by a rebound in investment growth, as uncertainty relating to the Eurozone sovereign debt crisis gradually recedes. This process should also encourage firms to increase their rate of inventory accumulation, a factor that weighed on growth in 2012H1. Overall, our baseline case is for growth to build momentum steadily throughout 2013, with GDP expanding by 3.3% overall. However, risks are skewed to the downside, particularly with




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regard to our assumption that uncertainty will recede sufficiently to encourage a recovery in investment.

Although near-term prospects remain fairly benign, apart from the Eurozone risk, it is concerning that the economy has generally suffered from net capital outflows since 2008. These intensified in the run-up to this year’s election, with over US$51bn flowing out in 2011H2 and a further US$23bn in 2012Q1. As expected, the resolution of political uncertainty led to some respite in Q2 but, with global macroeconomic uncertainty still high, we expect a resumption of capital outflows in H2. These persistent net outflows are symptomatic of a number of long-term challenges that will need to be overcome if potential growth is to be raised, a stated aim of the administration. Theoretically, as a relatively fast-growing economy with a large internal market, Russia should attract net capital inflows. But concerns over the security of property rights and policy stability have deprived the economy of finance for potential investment projects. Potential output is projected to rise by 3.8%pa over the next 10 years, a significantly lower rate than in the previous decade. GDP is set to expand by 3.4% in 2012, having grown by 4.4% in 2011 and to be slightly below potential growth at 3.3% in 2013. As a result, the large output gap of 1.7% in 2011 will contract in 2012 to 0.5% and increase in 2013 to 1.1%, and it is not forecast to close fully until 2018. The main contribution to growth in potential output over the coming decade comes from expanding capital usage. The 0.3%pt detraction from shrinking labour usage reflects the 0.8%pa fall in the working population over the next ten years and an increase in the participation rate which combine to reduce the labour supply by 0.4%pa. For the capital stock's contribution of 2.3%pt, the main factor is significantly lower investment growth (at 6.2%pa) than in the previous decade. Finally, total factor productivity growth's significantly higher contribution of 1.8%pt reflects the better contribution to potential growth from factors influencing production other than labour and capital over the coming decade.

Long-term forecast for Russia

2002-2006 2007-2011 2012-2016 2017-2021

GDP 6.5 3.0 3.8 3.9

Consumption 10.5 6.1 4.8 4.0

Investment 11.5 4.9 6.7 5.7

Government Consumption 2.4 1.1 1.9 2.7

Exports of Goods and Services 9.4 2.0 4.0 5.2

Imports of Goods and Services 18.7 8.1 7.5 6.6

Unemployment (%) 7.9 7.0 5.7 6.1

Consumer Prices 12.5 10.0 5.7 5.3

Current Balance (% of GDP) 9.5 5.2 1.7 -1.0

Exchange Rate (vs USD) 29.3 28.4 32.1 36.5

General Government Balance (% of GDP) 4.9 1.0 -0.7 -0.8




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Long-term forecast for Russia

2002-2006 2007-2011 2012-2016 2017-2021

Short-term interest rates (%) 7.9 8.1 7.6 7.3

Long-term interest rates (%) 4.4 7.8 7.7 7.5

Working population 0.1 0.0 -0.8 -0.9

Labour supply 0.7 0.4 -0.3 -0.5

Participation ration 71.6 73.3 75.0 76.4

Labour productivity 5.6 2.2 4.0 4.5

Source: State Committee of the Russian Federation/CEIC




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12.2 OVERVIEW OF THE MOSCOW NEW-BUILD BUSINESS CLASS RESIDENTIAL MARKET, 2012

Demand

By the end of 2012 the sales volume in the new-build business-class residential property market (based on completed transactions only) had amounted to approximately 178,000 sq m, or 1,800 flats and apartments.

The average number of transactions during 2012 was approximately 150 flats per month, which is by 11% higher than in 2011.

Geographically, the structure of demand has changed only slightly. Whereas at the end of 2011 the Southern (25%) and North-Western (23%) Administrative Districts of Moscow where residential construction activity peaked held a leading position, in 2012 the highest demand levels were observed in the Eastern (26%) and Southern (17%) Administrative Districts of Moscow, with the North-Western Administrative District (16%), South-Western and Central Administrative Districts (15% and 10% respectively) following closely.

The trend towards more compact, and thus more affordable, business class flats remained well-pronounced in 2012: flats of up to 80 sq m made up almost 35% of total demand, flats of 80 sq m - 100 sq m was 15%.

The average purchaser budget in 2012 was $400,000 (vs $580,000 at the end of 2011).

Supply

By the end 2012 the total new-build business-class stock in Moscow comprised 42 residential complexes.

Fifteen new projects (400,000 sq m) located predominantly in the Western Administrative Districts were added to the listing during 2012.

The volume of supply of new-build business-class housing increased by over 100% 2012 compared to 2011.

By the end of March 2012, new-build supply in the business-class segment in Moscow comprised 5,200 flats and apartments (approximately 554,000 sq m), flats prevailing with a 93% share in total supply.

Five large residential complexes account for approximately 50% (more than 252,000 sq m) of the current supply.

The geographical distribution of supply demonstrates that the Western Administrative District of Moscow held the leading position with a 26% share of the total supply in 2012 (vs 15% in 2011). The South-Western Administrative District followed with 21% of supply.




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Flats with a floor area of up to 80 sq m accounted for 27% of total supply in 2012, followed by flats of between 100 and 120 sq m and 120 to 150 sq m of floor area – 22% and 24% respectively.

The average floor area of a business-class flat amounted to 108 sq m in 2012, which is by 5% less than the average floor area of a flat purchased in 2011 (114 sq m).

Prices

The average weighted dollar price for new-build business-class residential accommodation by the end of 2012 increased by almost 8% (to $7,350 per sq m) compared to 2011.

The growth in prices was partly due to the weakening US Dollar and to progress in construction in many of the schemes in the listing (the prevailing share of schemes reached advanced stages of construction), the quick absorption of the cheapest offer, and the increasing developer confidence in further growth of solvent demand.

The average weighted price for new-build business-class residential accommodation peaked twice during 2012 – in April and in December.

Traditionally, the highest asking prices for business-class flats are concentrated in the Central Administrative District of Moscow. By the end of 2012 the average asking prices for new-build business-class residential accommodation in the South-Western Administrative District of Moscow almost reached the asking prices of the Central Administrative District. The reason was that 60% of total new-build supply of the South-Western Administrative District is represented by completed projects.

Trends

Demand for business-class accommodation in 2013 is expected to grow due to new announced projects and completion of the key current projects.

The monthly number of new-build transactions will increase by 10-15% per year.

An annual increase in asking prices in the business-class segment will not exceed 10% in 2013.

10 new projects, 50% of which comprise apartments, will be added to the listing in 2013.

Flats with a floor area ranging between 80 sq m and 120 sq m are expected to be most sought after in 2013.




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13.0 Valuation

13.1 VALUATION CONSIDERATIONS

In determining the Market Value of the Property we have had regard to the following valuation considerations:

Established residential location in an ecologically friendly north-eastern district of Moscow, within 1 km of Sokolniki Park;

Situation in a quiet neighbourhood albeit within 0.45 km to the district’s busiest square where varied social, retail, leisure and transport amenities are concentrated;

Easy and convenient commute to both the city centre and the MKAD;

High probability of obtaining planning permission to build above 35 metres;

The proposed scheme is to be built to a high standard and specification of construction meeting the requirements for modern business class residential schemes, with parking provision of 2 car spaces per flat;

A large commercial component comprising three levels of the proposed building;

Increasing demand for business-class residential accommodation in Moscow;

Anticipated low competition for the proposed scheme as there is high probability that no residential development will commence in 2013-2014 in the Subject Property’s locale.

13.2 VALUATION APPROACH

In valuing the Property, we have applied the residual approach. This methodology is accepted practice for development sites and development projects in the course of construction4. The residual approach calculates site value as an amount the rational, third party hypothetical developer/ investor would bid or pay for the subject site given the highest and best use of the site.

The residual approach calculates site value as an amount the rational third party or hypothetical developer could afford to bid or pay for the site given the highest and best use of the site. In adopting the residual approach to valuation, there are two different methodologies which can be used by the valuer to assess Market Value:

the discounted cash flow (DCF) methodology;

the traditional static residual method.

4 Valuation information paper (VIP) 12 Valuation of Development Land published by the RICS.




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The DCF technique involves the calculation of the net present value (NPV) of all future costs and income to be incurred and generated by the property. DCF allows reflecting the time value of money: the cash flow is discounted at an appropriate rate and in turn generates an NPV for the cash flow, which is the sum available for the purchase of the site at the valuation date. The static residual valuation approach adopts the more straightforward residual method, which does not entail the use of a full discounted cash flow. In this case, the timing of the development is reflected in terms of the cost of financing the development, as is the income generated upon completion and prior to sale. The static residual assumes that the property is completed as at the valuation date and thus is normally applicable for the valuation of properties with a total/ outstanding development period of up to 2 years from the valuation date as does not allow for the time value of money - the impact of discounting would be marginal over such a short period. Most crucially, the residual approach in far more reliable in times of market uncertainty, as, unlike the DCF, only current market inputs are used in determining the Gross Development Value (based on current, demonstrable sales rates, rental rates and yields), construction costs and developer’s profit levels. No element of prediction is involved. Risk factors associated with the property are reflected in the developer’s profit. Since the current valuation mirrors the post-crisis, rising market conditions, we believe that the adoption of the DCF technique is a more robust valuation approach as it allows reflection of the time value of money. Additionally, DCF is a more transparent and thus more client-friendly technique compared to the static residual that involves the application of the Agrus Developer software, which is not yet widely used and, consequently, less familiar and non-transparent to end-users of valuation reports.

The following steps have been made to arrive at the Market Value using the DCF technique:

Determination of the investment horizon and cash flow frequency periods within;

Forecast of cash flows for each period;

Determination of all costs related to the proposed development5;

Selection of the appropriate discount rate;

Discounting of the future cash flows to their present value.

The resultant NPV represents the Market Value of the Property.

In our valuation we have relied on information and data supplied by the Client verified and, if necessary, adjusted to correspond to the current market levels.

5 Development costs include planning and design, consents and approvals, project management and other soft costs, utility provision, hard construction costs, letting and sales agents’ fees and legal fees.




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The key parameters of the subject scheme as used in our valuation are summarised in Table 3.

Table 2. Area breakdown by use


Residential and apartment space, sq m 7,651 6,715 (including terraces – 215 sq m)

Lobby, sq m 228 06

Commercial space, sq m 1,891 1,589

Parking space, sq m/ car spaces 3,730 92

TOTAL 13,500 8,304

13.2.1 DETERMINATION OF DEVELOPMENT COSTS

The Client has provided us with a breakdown of estimated costs associated with the proposed scheme. We which we have applied in our calculations after having tested them against current market levels for similar projects in Moscow with the help of our construction and property management consultant - IMS Project Management LLC. The development costs, adjusted where necessary, as adopted in our calculations, are provided below.

Table 3. Development costs

Cost item Amount, $, VAT inclusive

Pre-Design, Design 4% 899,993

Construction (including demolition & landscaping)

22,499,816

Off-site utilities 3% 674,994

Project Management 3% 722,244

Construction Management 3% 674,994

Contingency (of all the above cost items) 5% 1,273,602

Total construction cost

26,745,644

Total construction cost per sq m

1,981

We have also made further cost assumptions, based on average market levels or, in part of the land lease outgoings, informations supplied by the Client and effective Russian legislation:


Cost item Amount, $ Amount, $

Marketing (of total sale proceeds) 1% 504,152

Sale agent fees (% total sale proceeds), residential & parking 2.5% 1,149,150

Sale agent fees (% total sale proceeds), commercial 2.5% 111,230

Legal Fee on (of total sales proceeds), 0.5% 252,076

Land lease outgoings 2,299,011

6 The planned net area of the lobby is 175 sq m. This space, however, comprises common use areas and is not

intended for sale.




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Cost item Amount, $ Amount, $

VAT on commercial space 107,110

TOTAL 4,422,729

The total land lease outgoings of $2,299,011 are calculated based on the following data and assumptions.

We have been provided by the Client with the current land lease outgoings for the subject site at RUB 1,257,357.74 ($41,397.63) per annum, which constitutes 1.5% of the cadastral value of the site of RUB 83,823,849.21 ($2,759,841.87).

We understand that in accordance with Decree ПП-46 of the Moscow Government dated January 27, 2009, land lease payments for the first year of lease when the permitted use of the site is changed should constitute 80% of the cadastral value of the site’s cadastral value in the case the site ratio7 of the proposed scheme exceeds the currently permitted. We cannot at this stage determine the cadastral value of the subject site after its permitted use is changed to residential construction. Therefore, we have estimated the land lease outgoings for the first year of land lease when the permitted use of the land plot is changed based on the present cadastral value of the site (RUB 83,823,849.21, or $2,759,841.87) at RUB 67,059,079.37 ($2,207,873.50).

We have assumed that the permitted use of the Property will change in 2013 and have adopted the sum of $2,207,873.50 as land lease outgoings for 2013.

We have further assumed that the land lease payments in the following years of development from January 1, 2014 up to commissioning on December 31, 2015, will remain at 1.5% of the sites’s cadastral value - RUB 1,257,357.74 (circa $41,397.63 per annum). Generally, land lease outgoings may change year on year, as the cadastral value may be subject to annual revision on January 1 of the respective year. Since we cannot predict the cadastral value amounts for the years 2014-2017, we have assumed that it will remain at RUB 1,257,357.74 (circa $41,397.63) per annum. Throughout the pre-construciton and construction periods the developer pays land lease outgoings in full, but after commissioning of the completed residential scheme, the land lease payments for the developer reduce proportionally to the sellable area left for post-completion sales.

Based on this, the assumed commissioning of the proposed scheme on December 31, 2015 and the amount of residential, commercial and parking space assumed to have been pre-sold before this date (slightly over 66%), we have derived the land lease payments for 2016 at $8,053.64. During the first two quarters of 2017, when the remainder of the sellable space in the subject scheme is assumed to be sold, the land lease outgoings have been adopted at $288.71.

7 The ratio of a building's total floor area to the size of the piece of land upon which it is built.




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In summary, the total land lease outgoings in 2013-2016 have been assumed as detailed in Table 5.


Year Land lease outgoings, $

2013 2,207,873.50

2014 41,397.63

2015 41,397.63

2016 8,053.64

2017 288.71

TOTAL (rounded) 2,299,011

VAT on commercial space has been determined on the basis of the difference between income from commercial sales and all costs associated with its construction at the prevailing rate as demonstrated below.

Table 6. VAT outgoings on commercial space

Sales proceeds, $ Construction costs, $ Difference VAT

4,449,200 3,747,036 702,164 107,110

All costs are at today’s prices and are VAT inclusive (where applicable).

Construction has been assumed financed from equity and pre-sales of the residential, apartment, commercial and parking space in the scheme.

With regard to the above, the total costs associated with the Property constitute $31,061,263, VAT inclusive (where applicable).




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13.2.2 REVENUE CASH FLOW OF THE PROPOSED SCHEME

Revenues generated by the proposed scheme are comprised of the sale proceed from residential, commercial and parking space.

In our calculations we have adopted the sellable area schedule broken down by use as detailed below.

Table 7. VAT Sellable area breakdown

Accommodation Sellable area, sq m

Residential, including: 6,215

Flats, floors 4-12 5,355

residential space 5,220

terraces (0.5 coefficient) 135

Flats, floors 13-14 , including: 860

residential space 780

terraces (0.5 coefficient) 80

Apartment, sq m 500

Commercial, including: 1,589

semi-basement 770

ground floor 320

first floor 499

Parking, car spaces 92

In liaison with our retail specialists we have determined the sellable area of the commercial space based on the preliminary floor plans supplied by the Client. We have adopted a loss factor for the commercial space on the ground and first floors of the scheme at 60 sq m and 11 sq m respectively to allow for common use areas (access to the sellable space). No loss factor have been adopted for the semi-basement as this floor lacks the central entrance and we have assumed that it will be sold to one owner-occupier.

Sale proceeds

In regard to the residential and apartment element of the scheme, including the underground parking, the sale proceeds were largely influenced by the following factors: the location of the subject site in the Eastern Administrative District, which is generally less popular as a residential location compared to the North-Western, Western and Central Administrative Districts; the site’s situation on a quiet street, a short and convenient walking distance to the retail, social and transport amenities in Sokolniki, which provides a more attractive alternative for potential purchasers than the schemes located in the Sokolinaya Gora District, but is slightly inferior to the residential schemes situated a closer distance to Sokolniki Park.




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In respect of the commercial element of the scheme, we are of the opinion that retailer and customer demand (fitness or yoga centre, beauty salon, children’s day care centre, dentist’s) would exist in respect of the retail space in the proposed development.

In arriving at our opinion of the sales proceeds for the proposed scheme, we have had regard to the following comparable evidence and market information:

Residential and apartment accommodation:

From the preliminary floor plans supplied by the Client, we understand that flats will occupy floors 4 to 12 of the scheme, the two top floors containing four flats of larger floor area, vast open terraces and the best views.

Floor 3 will comprise seven apartments with a total floor area of 500 sq m (subject to minor rounding). Floors 4 to 12 will comprise 5,335 sq m of sellable area. Floors 4 to 12 will have the same layout with four flats per floor (36 flats). With a total number of flats and apartments on floors 3-12 in the subject scheme of 43 and a total sellable area on these 5,855 sq m, we have derived an average selleable floor area of a flat at 136.2 sq m.

In arriving at our opinion of the sale price achievable for the residential and apartment accommodation in the proposed scheme we have taken into account pipeline schemes at different stage of completion as sales in the proposed scheme have been assumed both off-plan and post-completion.

We would like to note that in the process of gathering information on the comparable properties we have failed to find any information on completed transactions, as the conditions of sale and actual transaction prices are confidential. Therefore, we have relied on asking prices for comparable properties in our valuations.

Pipeline schemes:

Loft Garden apartment complex at 37-39, Rousakovskaya Street, in the Sokolniki District, in the Eastern Administrative District of Moscow. The scheme is planned to be commissioned in Q4 2014 and will comprise a three-story builing with a planned GBA of 12,579.9 sq m and will provide 127 one- to four-room flats ranging between 24.8 and 158 sq m, commercial premises on the ground floor, and a surface secured parking for 100 car spaces for rent. The scheme will provide a secured landscaped courtyard with a children’s playground. The scheme is within 0.2 km from Sokolniki metro station, and approximately 0.6 km to the west of the Property. Apartments of 105.6 sq m and 186.7 sq m are marketed on floor 2 of the scheme, in shell and core, at RUB 151,104 ($4,975) and 127,565 ($4,200) per sq m respectively. Generally, apartments of between 49.5 sq m and 99 sq m on various floors are offered for sale at asking prices ranging between RUB ($6,400) and RUB ($5,500) per sq m.

Business-class residential complex at bld. 1, 7/9 Borisa Zhigulenkova Street, in the Sokolinaya Gora District, in the Eastern Administrative District of Moscow. The scheme is planned to be completed by Q4 2013 and will comprise a complex of two residential towers of 13 and 16 floors originating from a common rectangular retail gallery. The




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residential element of the scheme will provide 133 one- to four-room flats ranging between 38.2 sq m and 75 sq m, commercial premises (office and retail) occupying the ground floor, and underground parking for 139 car spaces. The complex of reinforced concrete construction will be built to a high specification providing ceiling heights of 3 metres. The scheme will provide a secured landscaped courtyard with a kindergarten, a children’s playground and guest parking. A flat of 75 sq m on floor 13 is offered for sale at RUB 172,000 ($5,663) per sq m. Flats of 40.1 are offered on various floors (3-15) in shell and core at RUB 171,500 ($5,647) per sq m.

Loft Post apartment complex at 46, Engelsa Street, in the Bogorodskoye District, in the Basmanny District of the Central Administrative District of Moscow. The scheme is scheduled for completion in Q2 2014 and will comprise four brick-clad buildings of 3 and 5 floors. The scheme will include 200 one- to four-room apartments ranging between 25 sq m and 196 sq m, commercial premises on the ground floors of each of the buidlings and a surface secured car park for 100 car spaces (for rent). The complex will feature ceiling heights of between 3 and 4.8 metres. The scheme includes a landscaped courtyard with a children’s playground. Apartments of 106.1 sq m on the floor 3 and of 164.6 sq m on the ground floor are offered in shell and core at RUB 152,000 ($5,005) and RUB 167,200 ($5,505) per sq m. Flats of between 39.2 sq m and 53.7 sq m are offered on various floors (1-3) in shell and core at RUB 151,800-RUB 185,300 ($5,000-$6,100) per sq m.

Tivoli apartment complex at 6, Stromynsky Lane, in the in the Sokolniki District, in the Western Administrative District of Moscow, within 1 km of Sokolniki metro station and approximately 0.9 km to the north-east of the Property. The scheme is scheduled for completion by Q2 2013. It comprises a 5-storey apartment building of reinforced concrete and brick construction. The scheme includes 55 one- to four-room apartments ranging between 29 sq m and 90 sq m; commercial premises (office and retail) on the ground floor and a fitness club with a swimming pool in the basement. The scheme includes a landscaped courtyard with a children’s playground and guest parking. An apartment of 90 sq m on floor 5 is offered in shell in core at RUB 197,100 ($6,490) and RUB 134,044 ($4,163) per sq m respectively. Flats of between 30 sq m and 69.2 sq m are offered on various floors (3-5) in shell and core at RUB 197,100-RUB 203,630 ($6,490-$6,100) per sq m.

Shater residential complex at 19a, Berkhnyaya Krasnoselskaya Street, in the Krasnoselsky District of the Central Administrative District of Moscow. The scheme is planned to be commissioned in Q3-4 2013 and will comprise four 14-storey builings with a common three-level underground parking. Shater will provide 182 one- to four-room flats ranging between 52 and 160 sq m, commercial premises on the ground and first floor. The underground and surface secured car parks will comprise 325 car spaces (182 and 143 car spaces respectively). The scheme will provide a secured landscaped courtyard with a children’s playground, a kindergarten and a fitness centre with a 25-metre swimming pool. The scheme is within 0.2 km from Krasnoselskaya metro station, and approximately 0.1 km to north-eash of the Third Transport Ring. Flats of 138.2 sq m are marketed on floors 12 and 14, in shell and core at RUB 210,000 ($6,914) and RUB 240,000 ($7,902) per sq m. Flats of 121 sq m




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are marketed on floors 5 and 9, in shell and core at RUB 200,000 ($6,585) and RUB 210,000 ($6,914) per sq m.

More detailed information on asking prices for residential and apartment space in the comparable properties is provided in Appendix A hereof.

The residential and apartment comparables provided above represent the sale prices for accommodation in modern business-class completed and pipeline properties in analogous locations. For the proposed scheme we have adopted an average weighted sale price for the entire sales period of $6,000 per sq m for a flat with a sellable floor area of 136.2 sq m.

In determining the appropriate sale rate for the proposed scheme, apart from location characteristics, we have taken into account the development stage of the comparable schemes, the design and construction specification and quality of amenities provided/ to be provided, the situation of the comparable flats in the scheme (floor) and the size of the flat.

With off-plan sales having returned to the market, we have assumed a total sales period of 36 months for the residential accommodation in the subject scheme that will start simultaneously with construction and finish one year after construction completion.

Quarterly sales are assumed to be distributed as follows (based on demand for business-class accommodation on the whole and for flats of over 120 sq m in floor area in particular, with regard to seasonal demand fluctuations and construction progress): 19% of the flats will be sold in 2014, another 54% in 2015, and the remaining 27% - in 2016.

Based on the above assumptions, the sale proceeds from the residential accommodation, excluding penthouses, for the respective year are as set out below

Table 8. Sale proceeds from the residential and apartment accommodation on floors 3-12

Year Sales, % of total sellable area Sellable area sq m Sale proceeds (prior to

discounting), $

2014 19% 1,083 6,674,700

2015 54% 3,078 18,970,200

2016 27% 1,539 9,485,100

TOTAL 5,700 35,130,000

For the flats on the upper floors (13 and 14), we have adopted a sale price of $8,000 per sq m. This sale price does not reflect a discount on the terrace space as the sellable floor area of the terraces used in our calculations already includes a 0.5 discounting coefficient. This coefficient is applied taking into account the predominantly seasonal use and relatively large floor area of terraces in the subject scheme.

With regard to the sales schedule adopted for the upper floor residential space (24 months staring one year before construction commencement, on January 1, 2015), the sale proceeds from these space are as detailed below.




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Table 9. Sale proceeds from upper floor residential space

Year Sales, % of total sellable area Sellable area, sq m Sale proceeds (prior to discounting), $

2015 50% 430 3,440,000

2016 50% 430 3,440,000

TOTAL 950 6,880,000

Given the above assumptions, the resulting sales proceeds from the residential and apartment component of the subject scheme are $42,010,000, prior to discounting.

Commercial space

We have relied on a total sellable area of the commercial space of 1,589 sq m distributed over 3 floors as follows:

Table 10. Commercial area breakdown by floor

Year Loss factor, sq m Sellable area, sq m

semi-basement 0 770

ground floor 60 320

first floor 11 499

TOTAL 71 1,589

In determining the likely sale price achievable for this space we have taken into consideration the following comparable evidence:

Completed schemes:

A demise of 229.8 sq m on the ground of the Prioritet residential complex at 39a, Nagornaya Street, in the Kotlovka District, in the South-Western Administrative District of Moscow (completed in Q4 2011). The demise is offered for sale in shell and core at RUB 181,000 ($5,959) per sq m.

Pipeline schemes:

Retail/ office premises of between 172.3 and 289.1 sq m on the ground floor of the Tivoli apartment complex at 6, Stromynsky Lane, in the Sokolniki District, in the Western Administrative District of Moscow (scheduled for completion in Q2 2013). The premises are marketed in shell and core8 at $4,843-$5,369 per sq m depending on whether they face the inner yard or the main façade of the building.

Retail/ office premises of between 33.2 and 51.6 sq m on the ground floor of the Loft Post apartment complex at bld. 6, 47 Engelsa Street, in the Basmanny District of the Central Administrative District of Moscow (scheduled for completion in Q2 2014).

8 Standard fitout is in poor condition as after the conversion of the building into an apartment complex, it has not been

renewed.




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The premises are marketed in shell and core at $4,500-$5,500 per sq m depending on whether they face the inner yard or the main façade of the building.

Having relied on the comparable evidence above we have adopted an average sale price of $5,000 per sq m for the retail accommodation on the ground floor in the proposed scheme. Commecial space below or above the ground floor commands lower sale prices as its technical characteristicts (such as shop windows, a separate entrance) are inferior to those of ground floor space, and, consequently demand for it is lower compared to ground floor space. To reflect this and actual floor area of the demises in the semi-basement and on the first floor, we, having consulted with our commercial agency specialists, have applied sale prices of $1,800 and $3,000 per sq m for the semi-basement and the first floor commercial space respectively. Therefore, the average weighted sale price for the commercial element of the proposed scheme has been determined at $2,800 per sq m.

We have assumed that sales of commercial space will take place over 12 months, starting 6 months prior to construction completion (from July 01, 2015 through June 30, 2016). Sales proceeds from the commercial space will then constitute $4,449,200 as detailed below:

Table 11. Sale proceeds from commercial space

Year Sales, % of total sellable area Sellable area, sq m Sale proceeds (prior to discounting), $

2015 69% 1,090 3,052,000

2016 31% 499 1,397,000

TOTAL 1,589 4,449,200

In view of the above assumptions, the sales proceeds from the commercial component of the subject scheme are $4,449,200.

Parking space

The proposed scheme will provide 92 car spaces in the two-level underground parking. We have determined the likely sale price for parking space in the proposed scheme having analysed the following comparable evidence:

Pipeline schemes:

Car spaces in the underground parking of the business class residential complex at bld. 1, 7/9 Borisa Zhigulenkova Street are offered at RUB 1,350,000 ($44,448) per car space. The property has a parking ratio of 0.96 car spaces per flat;

Car spaces in the underground parking of the Tivoli apartment complex at 6, Stromynsky Lane, are offered at $50,000 per car space The property has a parking ratio of 0.56 car spaces per apartment;

Car spaces in the underground parking of the Shater residential complex at 19a, Verkhnyaya Krasnoselskaya Street. The asking price for an independent car space is RUB 1,500,000 ($49,386). The property has a parking ratio of 1.7 car spaces per flat.




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Market analysis demonstrates that in the business class housing segment a parking ratio of 2 car spaces per flat exceeds purchaser demand, which translates into a longer, compared to residential space, marketing period, or a discounted sale price for parking space.

Having analysed the comparable evidence above we have adopted a sale price of $43,000 per car space for the underground car park in the proposed scheme. Sales have been assumed over 42 months commencing, together with construction start and the start of residential sales, on January 1, 2014.

Table 12. Sale proceeds from parking space

Year Sales, % of total sellable area Sale proceeds (prior to discounting), $

2014 12% 474,720

2015 46% 1,819,760

2016 35% 1,384,600

2017 7% 276,920

TOTAL 3,956,000

Given the above assumptions, the sales proceeds from the car parking component of the proposed scheme is $3,956,000, prior to discounting. The total sale proceeds from the entire proposed scheme calculated as the sum of the sale proceeds from its residential, apartment, parking and commercial elements, amount, prior to discounting, to, $50,415,200. Discount rate The DCF technique involves the calculation of the net present value (NPV), of all future costs and income to be incurred and generated by the property. DCF allows reflecting the time value of money: the cash flow for each year within the time horizon is discounted at an appropriate rate; then the discounted annual cash flows are summed up to determine the NPV for the cash flow, or the sum available for the purchase of the site at the date of valuation. The cash flow is the net rental income assumed to be generated by the proposed scheme upon completion. The DCF technique also includes exit value (proceeds from the sale of the property at exit date), discounted to the date of valuation. The discount rate reflects the time value of money and a risk premium, representing compensation for the risk inherent in future cash flows that are uncertain. The appropriate discount rate will be the rate of return that adequately compensates the investor for the risks taken. The higher are perceived risks, the higher is investor’s required rate of return (discount rate). Therefore, discount rate is estimated based on the risks inherent in the property. We have used the cumulative approach to arrive at the appropriate discount rate. The discount rate is conventionally constructed from a risk-free rate and a premium for various risks.




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The risk-free rate is derived by reference to the return on an alternative form of perceived minimum-risk or riskless asset. Frequently the benchmark is the deposit rates of the largest and banks, or the redemption yield on government gilts. As risk-free rate for real estate properties located in the Russian Federation, European or Russian government gilts can be adopted. In the case when European risk-free rates are used, the risk-free rate is adjusted to allow for the country risk, the risk premium for investing in the particular country, Russia. Risk premium reflects additional return investors would require to receive for investing in a real estate property. The salient factors in deriving a property risk premium include:

risk premium for investing into real estate; illiquidity upon sale (e.g. lot size, transaction times, availability of finance) risk premium for costs of ownership and management

Selection of the risk-free rate

In our calculations the average of the redemption yields on Eurobonds of Russia’s leading banks with maturity (redemption) dates closest to the exit date assumed for the Property (June 30, 2017) has been adopted as risk-free rate. It constitutes, subject to rounding, 4.41%.

Table 13. Risk-free rate

Issuer Maturity date Yield to maturity, %

Gazprombank'19 03.05.19 5.61%

Sberbank'19 28.06.19 3.49%

VTB'18 02 22.02.18 4.14%

AVERAGE: 4.41%

Determination of risk premium for investing into the Property

Real estate property risks fall into two categories: systemic and unsystemic.

Systemic risk, also known as market risk, affects all assets and cannot be eliminated through diversification. Such risks (risk of structural change or market failure) may affect the market as a whole, particular subsectors or groups of property. Impact on the property of strengthening competition as a result of bulk completions of similar assets or increased unemployment, changes to property taxation such as VAT or nature protection legislation, or introduction of restrictions on rental rate levels are good examples of this.

Non-market, or ‘unsystemic’, or specific, risk factors are risks associated with individual assets. They are unique to each asset and is, therefore, uncorrelated with the market. Examples of these are cracks in load bearing structure, compulsory purchase of the underlying land plot for public needs, tenant’s default on rental payments.




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Table 14. Risk factors

Item

1 2 3 4 5 6 7 8 9 10

Systemic risks

Economic downturn dynamic

1 Increased competition dynamic

1

Changes in federal or local legislation dynamic

1

Non-systemic risks

Emergencies. Natural and artificial risks static 1

Criminogenic factors dynamic 1

Premature depreciation of the subject building

static

1

Unfavourable location dynamic

1

Planning risk dynamic

1

Development risk dynamic

1

Sales risk dynamic

1

Financing risk dynamic

1

Number of observations dynamic

Factored weight 2 2 0 0 3 1 0 0 0 3

Sum 2 4 0 0 15 6 0 0 0 30

Number of factors 57

Average weighted, bps 11

Risk premium (1 bp = 1%) 5.2%

Low liquidity risk premium

Premium for low liquidity risk reflects the duration of marketing (exposition) period required to dispose of the property and is calculated using the following formula:

P= (R х N)/12, where

P – risk premium for low liquidity;

R – risk-free rate;

N- marketing period (assumed at 12 months for the proposed scheme);

12- number of months in a year.

Therefore, for the subject shopping centre risk premium for low liquidity is determined at 4.41%.




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Risk premium for investment management

Risk premium for investment management normally varies between 1% and 3%. Having taken into account the location of the subject scheme, its size, anticipated management challenges and demand for similar type of real estate assets, we have arrived at the risk premium of 1.5% for the Property.

Table 15. Estimation of discount rate (from the valuation date through development completion)

Paramentre Value

Risk-free rate 4.41%

Risk premium for investment in real estate 5.2%

Risk premium for low liquidity 4.41%

Risk premium for investment management 1.50%

Discount rate (rounded) 16%

Taking into account the above and the opinion of the Capital Markets specialists of DTZ we have applied a discount rate of 16% in our calculations for the period between the valuation date and the subject scheme’s completion (assumed on December 31, 2016). A reduced, 10% discount rate has been applied for the remainder of the investment horizon to to reflect the fact that planning and development risks are no longer applicable once the scheme is commissioned and that by completion the subject scheme will achieve an aggregate 66% of pre-sales, which reduces sales risk.

Table 16. Estimation of discount rate (from the assumed development completion to the end of the investment horizon)

Paramentre Value

Risk-free rate 4.41%

Risk premium for investment in real estate 3.1%

Risk premium for low liquidity (4 month exposure period) 1.47%

Risk premium for investment management 1.0%

Discount rate (rounded) 10%

Cash flows within the adopted time horizon have been discounted at the end of each period.

We have discounted the future cash flows of the proposed scheme to their present value thus arriving at the gross residual site value of the Property - $12,052,397. Having deducted purchaser costs at 1.5% we have derived the net residual site value of the Property at $11,874,283.

Our valuation calculations are provided in Appendix 1 hereto.




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14.0 Final Value Estimation

We are of the opinion that the Market Value of the leasehold interest in the Property as at December

31, 2012, subject to the Assumptions and comments in this Report and Appendices, subject to a minor

rounding, is:-

$11,874,000 (Eleven Million, Eight Hundred and Seventy Four US Dollars)

Yours faithfully,

Alyona Neplyueva MRICS

Director Head of Valuation For and on behalf of

DTZIMS (IMS Project Management LLC)




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15.0 Definitions of bases of valuations

15.1 MARKET VALUE

We have assessed Market Value in accordance with Valuation Standard 3.2. Under these provisions,

the term “Market Value” means “The estimated amount for which an asset or liability should

exchange 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, prudently and

without compulsion.”

In undertaking our valuation on the basis of Market Value we have applied the conceptual framework

which has been settled by the International Valuation Standards Committee (IVSC). The conceptual

framework is included in VS 3.2 and is reproduced below:-

3.2. The term property is used because the focus of these Standards is the valuation of property.

Because these Standards encompass financial reporting, the term Asset may be substituted for

general application of the definition. Each element of the definition has its own conceptual

framework.

3.2.1 'The estimated amount ...' Refers to a price expressed in terms of money (normally in the

local currency) payable for the property in an arm's-length market transaction. Market Value is

measured as the most probable price reasonably obtainable in the market at the date of valuation in

keeping with the Market Value definition. It is the best price reasonably obtainable by the seller and

the most advantageous price reasonably obtainable by the buyer. This estimate specifically excludes

an estimated price inflated or deflated by special terms or circumstances such as atypical financing,

sale and leaseback arrangements, special considerations or concessions granted by anyone associated

with the sale, or any element of Special Value.

3.2.2 '... a property should exchange ...' Refers to the fact that the value of an asset is an estimated

amount rather than a predetermined or actual sale price. It is the price at which the market expects a

transaction that meets all other elements of the Market Value definition should be completed on the

date of valuation.

3.2.3 '... on the date of valuation ...' Requires that the estimated Market Value is time-specific as of

a given date. As markets and market conditions may change, the estimated value may be incorrect or

inappropriate at another time. The valuation amount will reflect the actual market state and

circumstances as of the effective valuation date, not as of either a past or future date. The definition

also assumes simultaneous exchange and completion of the contract for sale without any variation in

price that might otherwise be made.

3.2.4 '... between a willing buyer ...' Refers to one who is motivated, but not compelled to buy. This

buyer is neither over-eager nor determined to buy at any price. This buyer is also one who purchases

in accordance with the realities of the current market and with current market expectations, rather

than on an imaginary or hypothetical market which cannot be demonstrated or anticipated to exist.

The assumed buyer would not pay a higher price than the market requires. The present property

owner is included among those who constitute 'the market'. A valuer must not make unrealistic

assumptions about market conditions or assume a level of Market Value above that which is

reasonably obtainable.




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3.2.5 '... a willing seller ...' Is neither an over-eager nor a forced seller prepared to sell at any price,

nor one prepared to hold out for a price not considered reasonable in the current market. The willing

seller is motivated to sell the property at market terms for the best price attainable in the (open)

market after proper marketing, whatever that price may be. The factual circumstances of the actual

property owner are not a part of this consideration because the 'willing seller' is a hypothetical owner.

3.2.6 '... in an arm's-length transaction ...' Is one between parties who do not have a particular or

special relationship (for example, parent and subsidiary companies or landlord and tenant) which may

make the price level uncharacteristic of the market or inflated because of an element of Special Value,

(defined in IVSC Standard 2, para. 3.11). The Market Value transaction is presumed to be between

unrelated parties each acting independently.

3.2.7 '... after proper marketing ...' Means that the property would be exposed to the market in the

most appropriate manner to effect its disposal at the best price reasonably obtainable in accordance

with the Market Value definition. The length of exposure time may vary with market conditions, but

must be sufficient to allow the property to be brought to the attention of an adequate number of

potential purchasers. The exposure period occurs prior to the valuation date.

3.2.8 '... wherein the parties had each acted knowledgeably, prudently ...' Presumes that both the

willing buyer and the willing seller are reasonably informed about the nature and characteristics of the

property, its actual and potential uses and the state of the market as of the date of valuation. Each is

further presumed to act for self-interest with that knowledge and prudently to seek the best price for

their respective positions in the transaction. Prudence is assessed by referring to the state of the

market at the date of valuation, not with benefit of hindsight at some later date. It is not necessarily

imprudent for a seller to sell property in a market with falling prices at a price which is lower than

previous market levels. In such cases, as is true for other purchase and sale situations in markets with

changing prices, the prudent buyer or seller will act in accordance with the best market information

available at the time.

3.2.9 '... and without compulsion' Establishes that each party is motivated to undertake the

transaction, but neither is forced or unduly coerced to complete it.

3.3 Market Value is understood as the value of a property estimated without regard to costs of

sale or purchase and without offset of any associated taxes."




Appendix A

Comparable evidence for residential space




Comparable evidence for residential space

Complex/Developer Borisa Zhigulenkova / Morton Loft Garden / Red Development Loft Post / Red Development Tivoli Shater

Address

7/9, build. 1, Borisa Zhigulenkova Street,

Moscow

37-39, Rusakovskaya Street, Moscow 46, Fridriha Engelsa Street, Moscow 6, Strominskiy Lane, Moscow 19A, Verhnaya Krasnoselskaya

Street, Moscow

Number of buildings 2 buildings 1 building 4 buildings 1 building 4 section building

Floors 13-16 3+mansard 3-5-6 (mansard) 5 14

Flats amount 133 127 200 55 182

Construction end 4Q 2013 4Q 2013 2Q 2014 2Q 2013 3-4Q2013

Description Underground for 139 parking places no underground parking. Only the surface

for 100 parking spaces for rent

no underground parking. Only the

surface for 100 parking spaces for rentUnderground for 31 parking places

Underground for 311 parking

places

Asking price per parking

space

starting from 1,350,000 RUB depending

on flat area and the parking space

area

4000 RUB per parking space per month4500 RUB per parking space per

month50,000 USD per parking space

1,500,000 RUB per parking

space and 2,700,000-3,000,000

for interdependent space for 2

cars

Flat, sq m 3 floor, 40.1 sq m 2 floor, 105.6 sq m 1 floor, 53.7 sq m 3 floor, 57.6 sq m 5 floor, 121 sq m

Flat asking price, RUB 6,877,150р. 15,956,602р. 9,949,185р. 10,983,157р. 24,200,000р.

Asking price, USD/sq m $5,647 $4,975 $6,100 $6,278 $6,585

Flat 4 floor, 54.4 sq m 2 floor, 89.4 sq m 1 floor, 41.6 sq m 3 floor, 47.5 sq m 8 floor, 150 sq m



Flat 5 floor, 40.1 sq m 2 floor, 186.7 sq m 1 floor, 164.6 sq m 3 floor, 30 sq m 9 floor, 159 sq m



Flat 10 floor, 40.1 sq m 2 floor, 70.6 sq m 1 floor, 74 sq m 4 floor, 44.1 sq m 9 floor, 121 sq m



Flat 11 floor, 40.1 sq m 3 floor, 99 sq m 2 floor, 39.2 sq m 4 floor, 72.8 sq m 11 floor, 52 sq m



Flat 13 floor, 75 sq m 3 floor, 86.6 sq m 2 floor, 49.5 sq m 4 floor, 30 sq m 12 floor, 138.2 sq m









Flat 15 floor, 40.1 sq m 5 floor, 65.6 sq m 3 floor, 43 sq m 5 floor, 69.2 sq m 14 floor, 138.2 sq m



Flat 5 floor, 88.4 sq m 3 floor, 106.1 sq m 5 floor, 51.1 sq m

Flat asking price, RUB 14,767,207р. 16,128,830р. 10,569,426р.

Asking price, USD/sq m $5,500 $5,005 $6,810

Flats




Appendix B

Assessment of the Market Value of the Property applying the residual approach

DTZ

FINANCIAL MODEL PREPARED FOR TRAORE HOLDINGS LIMITED

In respect of the land site located at

22, Barbolina Street, Moscow, Russia

Assumptionscurrency $ 30.3727

Site assumption Valuation date

Site area, hect 0.1851 Valuation date 01/01/2013

Land tax 2,299,011 Valuation date 31/12/2012

Land acquisition cost 0 Discount rate Annual Quarterly

GBA, sq m, including: 13,500 Discount rate 16.0% 3.78%

Residential space, sqm 7,651 Discount rate 10.0% 2.41%

Commercial space, sq m 1,891

Lobby, sq m 228 Structuring Assumptions

Parking space, sq m 3,730 Number of (cash flow) periods in a year 4

Areas for sale assumptions Number of months in a period 3

Number of flats 47

Residential & apartment space (inclusive of terraces), floors 3-14, sqm 6,715 Financing

Residential & apartment space, floors 3-12, sqm 5,720 Equity - LTC set @ development phase, % 40%

Terraces, floors 4-12 (50% coefficient), sq m 135 Senior debt - LTC set @ development phase, % 60%

Residential space, floors 13-14 , sqm 780

Terraces, floors 13-14 (50% coefficient), sq m 80 Debt facility cost of funds Annual Quarterly

Commercial space, sq m 1,589 Development senior debt facility cost of funds, % 10.00% 2.41%

Parking scales 92

Sale assumptions Timing Quarterly

Sale price per sq m, residential space 6,000 Costs

Sale price per sq m, penthhouse space 8,000 Pre-Design, Design start date 01/01/2014 01/01/2013

Sale price per sq m, commercial space 2,800 Periods for Pre-Design, Design (must be negative) -12

Parking sale price per lot 42,802 43,000 Pre-Design, Design end date 01/01/2016

Sale proceeds (regardless of construction progress) Pre-Design, Design distribution S-curve

Residential & apartment sale proceeds, floors 3-12 35,130,000 Demolition start date 01/01/2014

Residential sale proceeds, floors 13-14 6,880,000 Periods for Demolition (must be negative) -1

Parking sale proceeds 3,956,000 Demolition end date 01/04/2014

Commercial sale proceeds 4,449,200 Demolition distribution S-curve

Total sale proceeds 50,415,200 Construction start date 01/01/2014

Periods for Construction (must be negative) -8

Costs, VAT inclusive per sqm Total budget, $ mln Construction end date 01/01/2016

Pre-Design, Design 4% 899,993 Construction distribution S-curve

Demolition Off-site utilities start date 01/01/2014

Periods for Off-site utilities (must be negative) -1

Construction 22,499,816 Off-site utilities end date 01/04/2014

Off-site utilities 3% 674,994 Off-site utilities distribution S-curve

Construction Management 3% 674,994 Construction Management start date 01/01/2013

Project Management 3% 722,244 Periods for Construction Management (must be negative) -12

Contingency 5% 1,273,602 Construction Management end date 01/01/2016

Marketing (of total sale proceeds), residential 1.0% 504,152 Construction Management distribution S-curve

Total development cost excluding land tax & Marketing 26,745,644 Project Management start date 01/01/2014

Total development cost per sq m 1,981 Periods for Project Management (must be negative) -12

Project Management end date 01/01/2016

Fees Project Management distribution S-curve

Sale agent fees (% total sale proceeds), residential & parking 2.50% Contingency start date 01/01/2014

Sale agent fees (% total sale proceeds), commercial 2.50% Periods for Contingency (must be negative) -8

Sale legal fees (% total sale proceeds) 0.50% Contingency end date 01/01/2016

Sale agent fees 1,260,380 Contingency distribution S-curve

Sale legal fees 252,076 Marketing (of total sale proceeds), residential start date 01/01/2014

Periods for Marketing (of total sale proceeds), residential (must be negative) -14

Growth, % Annual Quarterly Marketing (of total sale proceeds), residential end date 01/07/2017

Costs growth 0.00% 0.00% Marketing distribution S-curve

Market sale growth rate (first 12 months) 0.00% 0.00% VAT on commercial space 107,110

Market sale growth rate (from 01.04.2014) 0.00% 0.00%

Sale schedule

Residential & apartment space on floors 3-12

Sale start date 01/01/2014

Periods for sale 12

Sale end date 01/01/2017

Sale distribution Linear

Parking space


Periods for sale 14



Commercial space


Periods for sale 4



Residential space on floors 13-14


Periods for sale 8



Growth timing

Costs growth start date 15/11/2012

Rent growth start date 15/11/2012

Sale growth start date 15/11/2012

Exit date 01/07/2017




DTZ




Cash flow 31/12/2012currency $

Periods (quarter) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Period start date Total 01/01/2013 01/04/2013 01/07/2013 01/10/2013 01/01/2014 01/04/2014 01/07/2014 01/10/2014 01/01/2015 01/04/2015 01/07/2015 01/10/2015 01/01/2016 01/04/2016 01/07/2016 01/10/2016 01/01/2017 01/04/2017

EXPENDITURE

Land tax 2,299,011 551,968 551,968 551,968 551,968 10,349 10,349 10,349 10,349 10,349 10,349 10,349 10,349 3,506 2,497 1,280 771 225 64

Costs growth 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Pre-Design, Design distribution (S-curve) 100.00% 10.00% 20.00% 30.00% 10.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 5.00% 7.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Pre-Design, Design 899,993 89,999 179,999 269,998 89,999 27,000 27,000 27,000 27,000 27,000 27,000 45,000 62,999 - - - - - -

Demolition distribution (S-curve) 100.00% 0.00% 0.00% 0.00% 0.00% 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Demolition - - - - - - - - - - - - - - - - - - -

Construction distribution (S-curve) 100.00% 0.00% 0.00% 0.00% 0.00% 3.13% 9.38% 15.63% 21.88% 21.88% 15.63% 9.38% 3.13% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Construction 22,499,816 - - - - 703,119 2,109,358 3,515,596 4,921,835 4,921,835 3,515,596 2,109,358 703,119 - - - - - -

Off-site utilities distribution (S-curve) 100.00% 0.00% 0.00% 0.00% 0.00% 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Off-site utilities 674,994 - - - - 674,994 - - - - - - - - - - - - -

Construction Management distribution (S-curve) 100.00% 1.39% 4.17% 6.94% 9.72% 12.50% 15.28% 15.28% 12.50% 9.72% 6.94% 4.17% 1.39% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Construction Management 674,994 9,375 28,125 46,875 65,624 84,374 103,124 103,124 84,374 65,624 46,875 28,125 9,375 - - - - - -

Project Management distribution (S-curve) 100.00% 0.00% 0.00% 0.00% 0.00% 3.13% 9.38% 15.63% 21.88% 21.88% 15.63% 9.38% 3.13% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Project Management 722,244 - - - - 22,570 67,710 112,851 157,991 157,991 112,851 67,710 22,570 - - - - - -

Contingency distribution (S-curve) 100.00% 0.00% 0.00% 0.00% 0.00% 3.13% 9.38% 15.63% 21.88% 21.88% 15.63% 9.38% 3.13% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Contingency 1,273,602 - - - - 39,800 119,400 199,000 278,600 278,600 199,000 119,400 39,800 - - - - - -

Marketing distribution

Marketing (of total sales proceeds) 504,152 - - - - 11,330.20 11,330 18,752 30,082 46,112 75,038 55,072 96,598 43,797 59,312 20,730 33,230 1,978 791

VAT on commercial space distribution (manual)

VAT on commercial space 107,110 107,110

Sale agent's and legal fees 1,512,456 - - - - 33,991 33,991 56,255 90,246 138,336 225,113 165,216 289,793 131,392 177,936 62,189 99,690 5,934 2,374

Expenditure, total 31,168,373 651,343 760,092 868,841 707,592 1,607,528 2,482,262 4,042,928 5,600,478 5,645,848 4,211,822 2,600,230 1,234,604 178,695 239,745 84,199 133,691 8,137 110,339

REVENUE

REVENUE FROM SALE

Residential space (Sale distribution) 100.00% 0.00% 3.00% 3.00% 5.00% 8.00% 12.00% 15.00% 12.00% 15.00% 10.00% 8.00% 5.00% 4.00% 0.00% 0.00%

Residential & apartment sale proceeds, floors 3- 35,130,000 - - - - 1,053,900 1,053,900 1,756,500 2,810,400 4,215,600 5,269,500 4,215,600 5,269,500 3,513,000 2,810,400 1,756,500 1,405,200 - -

Residential space, penthouses (Sale distribution) 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 25.00% 0.00% 25.00% 0.00% 25.00% 0.00% 25.00% 0.00% 0.00%

Residential sale proceeds, floors 13-14 6,880,000 - - - - - - - - - 1,720,000 - 1,720,000 - 1,720,000 - 1,720,000 - -

Parking space (Sale distribution) 100.00% 0.00% 0.00% 0.00% 0.00% 2.00% 2.00% 3.00% 5.00% 10.00% 13.00% 10.00% 13.00% 12.00% 10.00% 8.00% 5.00% 5.00% 2.00%

Parking sale proceeds 3,956,000 - - - - 79,120 79,120 118,680 197,800 395,600 514,280 395,600 514,280 474,720 395,600 316,480 197,800 197,800 79,120

0 #DIV/0!

Commercial space (Sale distribution) 100.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 20% 48% 9% 23% 0.00% 0.00% 0.00% 0.00%

Commercial sale proceeds 4,449,200 - - - - - - - - - - 896,000 2,156,000 392,000 1,005,200 - - - -

Revenue, Total 50,415,200 - - - - 1,133,020 1,133,020 1,875,180 3,008,200 4,611,200 7,503,780 5,507,200 9,659,780 4,379,720 5,931,200 2,072,980 3,323,000 197,800 79,120

252,076.00

NOI

NOI, Total 19,246,827 651,343- 760,092- 868,841- 707,592- 474,508- 1,349,242- 2,167,748- 2,592,278- 1,034,648- 3,291,958 2,906,970 8,425,176 4,201,025 5,691,455 1,988,781 3,189,309 189,663 31,219-

Project net cash flow 19,246,827 651,343- 760,092- 868,841- 707,592- 474,508- 1,349,242- 2,167,748- 2,592,278- 1,034,648- 3,291,958 2,906,970 8,425,176 4,201,025 5,691,455 1,988,781 3,189,309 189,663 31,219-

Discount Factor 0.9816 0.9459 0.9114 0.8782 0.8462 0.8154 0.7857 0.7571 0.7295 0.7029 0.6773 0.6527 0.7424 0.7249 0.7079 0.6912 0.6749 0.6590

Discounted Cash Flow 12,052,397 639,370- 718,943- 791,870- 621,416- 401,540- 1,100,171- 1,703,196- 1,962,559- 754,778- 2,314,017 1,968,966 5,498,728 3,118,912 4,125,941 1,407,792 2,204,448 128,009 20,574-

Gross Market Value 12,052,397

Market Value per ha 65,112,895 - - - - - - - - - - - - - - - - - -




DTZ




Summary & outputs 31/12/2012currency $

Market value

Market Value (incl. 1,5% acquisition agent & legal fees) per hect 65,112,895

Market Value (incl. 1,5% acquisition agent & legal fees) 12,052,397

Market Value per hect 64,150,635

Market Value of the Property 11,874,283

Valuation date

Valuation date 31.12. 2012

De-Kalo Ben-Yehuda & Co. Ltd. www.dbinv.com

Gibor Sport Building, 12th Fl., 7 Menachem Begin St., Ramat Gan 52681 Israel

Phone: +972-3-752-9000 Fax: +972-3-752-9002 [email protected]

‏4102מרץ,‏‏42‏

‏השקעה‏בחינת‏הצורך‏בירידת‏ערך

Rus Basilica Property & Investment

Limited‏

4104‏,בדצמבר‏20ליום‏

‏בע"מ‏נדל"ן‏אלרן

De-Kalo Ben-Yehuda & CO LTD - 2 -

מנכ"ל, גדי דנקנרמר

בע"מ אלרן נדל"ן

הנכבד, דנקנרמר

אלרן על ידי חברת נתבקשה( "מעריך‏השווי"‏-להלן קלו בן יהודה ושות' בע"מ )-דה חברת

חברת ב ההשקעהירידת ערך בהכרה מהפסד לבחון את הצורך ("החברה" -להלן ) בע"מ נדל"ן

Rus Basilica Property & Investment Limited ( בזיליקה" -להלן" ) בדצמבר, 13ליום

. "(מועד‏הערכת‏השווי" -)להלן 2132

עריכת דוחות כספיים והיא נערכה בהתאם לכללים ולהנחיות זו מיועדת לצרכי חוות דעת

הסתמכנו על חוות דעתנולצורך . IAS 28 -ו IAS 36שנקבעו בתקני חשבונאות בינלאומיים

בזיליקה והנהלת וכן על מידע שהתקבל מהנהלת בבזיליקההקשורים נתונים פיננסיים

אחרים. ואומדנים נוספים לרבות, הערכות שמאים ,החברה

נדרש להכיר בהפסד מירידת ערךהאם , המובאת להלן, הינה לבחון חוות הדעתמטרת

,בזיליקהיחידה מניבת המזומנים, ההשבה של סכום בריינו, האם , דהבזיליקהב ההשקעה

.בספריםערכה מ קטן

ירידת הפסד מהכרה בבהצורך לסייע להנהלת החברה בבחינת נערכה על מנתזו חוות דעת

ולמטרה זו בלבד. הדיווח הכספי בספרי החברהלצורך , כאמור לעיל,תה בבזיליקההשקע ערך

לא יוכל שלישיצד זו לא תשמש למטרות אחרות ולא תופץ לגוף שלישי )וכן חוות דעתלפיכך,

לעשות בה שימוש כלשהו או להסתמך עליה לכל מטרה שהיא ללא אישורינו מראש ובכתב.

13דוחות כספיים מבוקרים ליום תונים פיננסיים היסטוריים,עיון בנ התבססה עלעבודתנו

הערכות על , עריכת בירורים עם האחראים לעניינים הכספיים והחשבונאיים ,2132בדצמבר,

דיונים, אשר ועל ,שהתקבלו מהחברהשמאים הקשורות בנכסי הנדל"ן שבבעלות בזיליקה,

. םבהתבסס על מיטב ידיעתם וניסיונ ,ערכנו עם עובדים בכירים ונושאי משרה אחרים בחברה

דיקה או בחינה נראים לנו כאמינים, שלמים ועדכניים, אולם לא ביצענו כל בהמידע מקורות

על מנת לאמת את הנתונים, כאמור. עצמאית בלתי תלויה

ככל הערכת שווי כלכלית, אף הערכה זו התבססה על המידע האמור. שינויים במידע זה, או

משום אימות בחוות דעתנו. לפיכך, אין לראות יהשויים להשפיע, על תוצאותמידע נוסף, ע

כלשהוא לנכונותם, לשלמותם או דיוקם של נתונים אלו, אלא הערכה כלכלית המבוססת על

. להלן חוות הדעתמודלים כלכליים כמפורט בגוף


להלן מתייחסת למכלול הפרמטרים הכלכלייםש השקעה,בחינת הצורך בירידת ערך

ואין בה משום המלצה לפעולה בלבד בזיליקהשל סכום בר ההשבההקשורים בקביעת

נסי כלשהוא.פינ מכשירכלשהיא, לרבות המלצת השקעה ב

הרינו להצהיר, כי אין לנו כל עניין אישי במניות החברה, בעלי מניותיה או צדדים קשורים

ו זיקה אליהם או לצדדים להן, כמוגדר בדין או בפסיקה ולא מתקיימת בנו כל תלות א

.בחוק החברותקשורים אליהם כהגדרתם

ידוע לנו כי ממצאינו ישמשו את הנהלת החברה לשם הדיווח הפיננסי הנדרש במסגרת

אנו מסכימים כי חוות דעת זו תיכלל בדוח .העקרונות החשבונאיים המקובלים בישראל

שות לניירות ערך אם תידרש לכך.לצרכי תשקיף וכן בדיווחיה לר ,הכספי של החברה, לרבות

בחינת הצורך בהפרשה לירידת ערך אנו מעריכים את ההזדמנות לסייע לכם בקשר עם

בחוות . במידה שדרושות לכם הבהרות בנוגע לכל אחד מהנושאים הכלולים בזיליקהב השקעה

‏במידה שתידרש לכם. ה, או כל מידע נוסף, נשמח להרחיבדעתנו


‏‏ריכוז‏ממצאים

)דולרים(: 2132בדצמבר, 13ליום ,בזיליקה סכום בר ההשבה,שלהלן מציגה את הטבלה

(9,889,457)סכום בר השבה

55.98%שיעור החזקת החברה

(5,536,252)סכום‏בר‏השבה‏-‏חלק‏החברה

סכום‏בר‏השבה,‏בזיליקה

2132בדצמבר, 13הטבלה שלהלן מציגה את הרכב ההשקעה של החברה בבזיליקה ליום

)דולרים(:

סה"כהתאמותספריםפרטים

(1,797,390)696,833(2,494,223)שווי מאזני

SOKOLNIKI 1,797,390(696,833)2,494,223עודפי עלות

4,925,8954,925,895מוניטין

(4,925,895)(4,925,895)הפרשה לירידת ערך מוניטין

(5,536,252)(110,098)(5,426,154)הפרשה נוספת לירידת ערך

(5,536,252)(110,098)(5,426,154)סה"כ

הרכב‏השקעה


‏ים‏והשכלתם‏רטי‏המומחפ

‏פולברניס ‏שי בן בכלכלה עם התמחות בחשבונאות מאוניברסיטת B.A בעל תואר - רו"ח,

גוריון. מחזיק רישיון ישראלי לראיית חשבון.

בכלכלה עם התמחות בחשבונאות מאוניברסיטת בן גוריון. B.Aבעל תואר - רו"ח,‏ערן‏ברקת

מחזיק רישיון ישראלי לראיית חשבון.

‏המקצועי‏של‏מעריכי‏השווי‏םפרטי‏ניסיונ

תחום הערכות שווי שיר ב, בעל ניסיון ע2112משנת מנהל המחלקה הכלכלית - פולברניס‏מר

והייעוץ הכלכלי.

הייעוץ הכלכלי ובמחלקת בתחום מר פולברניס עבד מספר שנים בתחום הביקורת,לפני כן,

ובמהלכן (, PricewaterhouseCoopers) מיזוגים ורכישות במשרד רו"ח קסלמן את קסלמן

ותיות במשק הישראלי. היה שותף בליווי עסקאות משמע

תחום בעל ניסיון עשיר ב, 2112מנהל מקצועי ובכיר במחלקה הכלכלית משנת - ברקת‏מר

הערכות שווי והייעוץ הכלכלי.

גבאי את פורר-קוסט שנים בתחום הביקורת במשרד רו"ח, עבד מספר מר ברקתלפני כן,

ביקורת של חברות ל תיקיוניהשימש כמנג'ר ב, במהלכן (ERNST & YOUNGקסירר )

ציבוריות מהגדולות והמובילות במשק הישראלי וביצע בדיקות נאותות בתחום המיזוגים

והרכישות.

בין היתר, שימש מר ברקת כמומחה וכיועץ בהיערכות למעבר לדיווח לפי כללי ותקני

, לרבות מתן יעוץ לחברות בדבר יישומם המוקדם.IFRSחשבונאות בינלאומיים

וד רב,בכב

שי פולברניס, רואה חשבון

_______________________


‏

םענייניתוכן‏

7‏רקע .0

9‏מתודולוגיה .4

00‏השבה‏בר‏סכום‏הערכת‏תמצית .2

33 עלות עודפי בדיקת .1.3

32 בכללותה השקעה השבה בר סכום .1.2

07‏ממצאים‏ריכוז .2

01‏4104,‏בדצמבר‏20‏ליום‏פיירפורד‏הוגן‏שווי‏-'‏א‏נספח .5

31 ממצאים ריכוז .1.3


‏רקע .0

הרשומה בקפריסין, ואשר עוסקת בתחום הנדל"ן בזיליקה הינה חברה בבעלות פרטית,

המניב. בזיליקה, באמצעות חברות בנות מאתרת מקרקעין בעל פוטנציאל להשבחה.

או רוכשת החזקות בחברות בזיליקה מתקשרת עם בעלי הזכויות במקרקעין במוסקבה ו/

רוסיות בעלות זכויות במקרקעין. ביצוע הפעילות היזמית להקמת פרויקטים נעשה תוך

, שיתוף פעולה הדוק עם מוסדות התכנון במוסקבה. לבזיליקה שלושה פרויקטים עיקריים

בתחום הנדל"ן אשר ממוקמים ברוסיה ומנוהלים על ידי חברות נכון למועד הערכת השווי,

הנמצאות בקפריסין, בהולנד וברוסיה. בנות

הפרויקטים: שלושתלהלן תיאור

Golystin Project - אלפי מ"ר, למתחם 1.1 -פרויקט להסבת מרתף, המשתרע על שטח של כ

למסחר, בילוי ותרבות.

האתר נמצא במרכז מוסקבה, בסמוך לאתרי היסטוריה, ובקרבת מרכזים מסחריים

יוקרתיים ומרכזי בילוי.

, )חברה נכדה של Rassian Tales Group LLCכויות חכירת המרתף מצויות בידי חברת .ז

אלפי 121 -, תמורת דמי שכירות שנתיים של כ 2132בזיליקה בבעלות מלאה( עד סוף שנת

דולר לרשויות מוסקבה. במסגרת הפרויקט, קיימת דרישה מהרשויות להכיר בעלויות שיקום

הל משא ומתן בגין הרכישה.ינושהמבנים הקיימים במידה

עלויות הפרויקט המתמשכות אשר טרם הוגדרו, תלויות בצרכי החכירה הצפויות של

הפרויקט.

Sokolniki Project - פרויקט להקמת קומפלקס דיור ברובע סוקולניקי שבמוסקבה, לבניה

אלפי מ"ר. 23 - של כ

יקה, מחזיקה במקרקעין בשטח , חברה נכדה של בזילTinor Maksi LLCהחברה הרוסית,

אלפי מ"ר, המיועדים למגורים ולמסחר עם זכויות בניה, ועליהם בנוי חלק משלד 3.11 -של כ

של מרתף.


Dom Park Koltura Project011 - פרויקט להקמת מבנה משרדים על מגרש בגודל של כ -‏

מ"ר בשדרות זובובסקי במרכז העיר מוסקבה.

זכויות , בעלת AM Building Center CJSCעל ידי חברה רוסית, מבנה הפרויקט מבוצע

קומות 30שנים בשטחי הפרויקט מרשויות מוסקבה. המבנה כולל 92חכירה ארוכות טווח של

אלפי מ"ר, מתוכו יהיה ניתן 1.1 -מעל פני הקרקע ושתי קומות מרתף בשטח כולל של כ

קט הושלמה והוא מושכר לחברת תעופה ת הפרוייאלפי מ"ר. בני 1.1 -להשכיר שטח של כ

. 2133רוסית טרנסארו מחודש נובמבר

‏4104,‏בדצמבר‏20‏-בזיליקה‏החזקות‏מבנה‏

‏

מהרווח התפעולי של השותפות. 32%לחברה יש שותף בעל זכויות לקבלת *

, כך שלאחר 2131רד במהלך שנת נוספים ממניות פיירפו 1.1%יש הסכם לרכישת לבזיליקה**

.01% -כ השלמת הרכישה שיעור ההחזקה בפיירפורד יעמוד על

‏

‏

311% 02% 311% 311%

311%


‏ולוגיה‏ודמת .4

, קובעים נהלים שעל ישות ליישם IAS 36 -ו IAS 28 ,IAS 39, תקני חשבונאות בינלאומיים

השקעה בחברה כדי להבטיח שנכסיה לא יוצגו בסכום, העולה על הסכום בר ההשבה שלהם.

, נכס או יחידה מניבת מזומנים מוצגים בסכום, הגבוה מסכום בר ההשבה שלהם, להכלו

כאשר ערכם בספרים עולה על הסכום שיתקבל מהשימוש בהם או ממכירתם. במקרה זה חלה

.ירידת ערך והישות נדרשת להכיר בהפסד מירידת ערך

IAS 36 של נכס או מכירה השווי ההוגן בניכוי עלויותמגדיר סכום בר השבה כגבוה מבין

בהם. דהיינו, במקרה בו השווי ההוגן או שווי שווי השימושלבין ,יחידה מניבת מזומנים

השימוש, או שניהם גבוהים מהערך הפנקסני, לא נדרשת הישות להכיר בהפסד מירידת ערך.

IAS 36 ‏בקביעת ,אף קובע את ההיררכיה, להלן בסדר יורד ‏עלויות‏ההשווי ‏בניכוי הוגן

:המכיר

הראיה הטובה ביותר לשווי ההוגן בניכוי עלויות מכירה של נכס היא המחיר שנקבע

בהסכם מכירה מחייב בעסקה בין קונה מרצון למוכר מרצון הפועלים בצורה

מושכלת, מותאם בגין עלויות תוספתיות שניתן ליחסן במישרין למימוש הנכס.

ייב אך הנכס נסחר בשוק כאשר אין הסכם מכירה מח -מחיר מכירה בשוק פעיל

פעיל, השווי ההוגן בניכוי עלויות למכירה, יהיה מחיר השוק של הנכס בניכוי עלויות

המימוש.

מידע זמין המשקף את הסכום שישות היתה יכולה לקבל, בתאריך המאזן, תמורת

מימוש הנכס בעסקה בין מוכר מרצון לקונה מרצון הפועלים בצורה מושכלת.

:אומדת ישות ,ההשקעה של השימוש שווי בקביעת IAS,28לאומי בהתאם לתקן בינ

שיופקו חזוי אשר ,העתידיים המזומנים תזרימי אומדן של הנוכחי בערך חלקה את

הכלולה החברה של מהפעילויות המזומנים תזרימי כולל ,הכלולה החברה ידי על

ההשקעה. של הסופי ממימושה והתמורה

ינבעו כי חזוי אשר, העתידיים המזומנים תזרימי אומדן של הנוכחי הערך או את

.הסופי ומהמימוש מההשקעה שיתקבלו מדיבידנדים

‏.בהנחות‏מתאימות‏שתי‏השיטות‏יביאו‏לתוצאה‏זהה

‏

לשם היוון תזרים המזומנים העתידי למועד בדיקת ירידת הערך יש לקבוע את מחיר ההון

ף הערכות שוק שוטפות של ערך הזמן של לשקהמאפיין את נשוא הבדיקה. שיעור הניכיון נועד

הכסף וכן את הסיכונים הספציפיים, אשר בגינם לא הותאמו האומדנים של תזרימי

Weighted Average Cost Of-המזומנים העתידיים. מחיר ההון מחושב באמצעות מודל

Capital (WACC):דהיינו, ממוצע משוקלל של מקורות המימון אשר נקבע להלן ,


WACC=Ke*E/V+Kd*(1-T)*D/V

כאשר:

E - .הינו שווי האקוויטי של הפעילות במונחי שווי שוק, אשר נקבע באופן איטרטיבי

D- .הינו שווי השוק של החוב הפנקסני

V - (E+D )- החברהשווי השוק של כלל מקורות המימון של.

Ke - ברמת סיכון דומה. בעלי מניותהינו שיעור התשואה הנדרש על ידי

Kd- של הינו מחיר החוב, הנקבע על ידי ממוצע משוקלל של מקורות החוב הפיננסים

החברה.

T - שחל על החברה.שיעור המס האפקטיבי לטווח ארוך

נקבע כדלקמן: ההון העצמיחישוב התשואה על

Ke=Rf+*(Rm-Rf)+P

Rf - שראל הינו שיעור הריבית חסרת הסיכון. כאומדן לריבית חסרת סיכון ריאלית בי

השתמשנו בתשואה לפדיון של גליל )אגרת חוב ממשלתית צמודת מדד(.

- מקדם הסיכון היחסי. מקדם זה משקף את הסיכון היחסי הכרוך בהשקעה מסוימת

הביטא הינה ומבוסס על רמת המתאם בין תשואת ההשקעה עם תשואת שוק ההון כולו.

החברה.המדד לסיכון "הסיסטמטי" של

רגישות גבוהה לשינויים במצב השוק )קרי, במקרה של לעסק, 3-ה גדול מכאשר מקדם ז

מיתון יושפע הענף לרעה יותר מענפים אחרים, ובמקרה של שגשוג יושפע הענף לטובה יותר

.מהממוצע לשינויים במצב השוק יותררגיש העסקשווי (, וכפועל יוצא,מענפים אחרים

(Rm-Rf)- הינה פרמיית הסיכון הממוצעת, פרמיה זו נקבעת כהפרש בין תשואת השוק לבין

הריבית הריאלית חסרת הסיכון.

P- שיעור תשואה נוסף, המשקף סיכון ספציפי, לרבות, פרמיה נוספת הנדרשת במקרה של

העדר סחירות וגודל.


‏תמצית‏הערכת‏סכום‏בר‏השבה .2

נכסים מוחשיים, ותבעלותר להערכת שווי חברות המתודולוגיה המתאימה והמקובלת בי

החברהשיטה זו מתבססת על שווי נכסי , הינה שיטת השווי הנכסי. כדוגמת חברות נדל"ן

יכול שתיעשה תוך ביצוע הבדיקה. המשתקפים במאזנ ם, כפי שההבניכוי התחייבויותי

ויות. התאמות ותיקונים, בניסיון לאמוד את שווי השוק של הנכסים וההתחייב

בעבודתנו, בחרנו ליישם את שיטת השווי הנכסי, הן בבחינת עודפי העלות שיוחסו לנכסיה

והתחייבויותיה של בזיליקה, כפי שמופיעים בספרי החברה כחלק מהרכב ההשקעה, והן

להשקעה בבזיליקה בכללותה )שווי מאזני בתוספת עודפי עלות מזוהים ומוניטין(.

‏בדיקת‏עודפי‏עלות .2.0

שקעההרכב ה

הטבלה שלהלן מציגה את הרכב השקעת החברה בבזיליקה, לפני בחינת עודפי עלות ו/או

, כפי שנמסרה מהנהלת החברה )דולרים(:2132בדצמבר, 13מוניטין, ליום

(2,494,223)שווי מאזני

SOKOLNIKI 2,494,223עודפי עלות

4,925,895מוניטין

(4,925,895)הפרשה לירידת ערך מוניטין

(5,426,154)הפרשה נוספת לירידת ערך

(5,426,154)סה"כ‏הרכב‏השקעה

הרכב‏השקעה‏בספרי‏אלרן‏נדל"ן

SOKOLNIKIעודפי עלות

, כפי שמוצג בספרי החברה, Sokolnikiבגין הנכס הטבלה שהלן מציגה את עודף העלות

וכן, את שוויו ההוגן, כפי שנאמד על ידי לעיל(, 1השקעה, כפי שמפורט בסעיף )כחלק מהרכב ה

)דולרים(: 2132בדצמבר, 13, ליום IMS Project Management LLC מקרקעין שמאי

6,057,524בספרי בזיליקה

11,874,000שווי הוגן

5,816,476הפרש

(1,163,295)מס מתייחס

4,653,181הפרש, נטו

39%חלק החברה באחוזים

1,797,390חלק החברה בהפרש

2,494,223עודף עלות, נטו בספרי החברה

(696,833)הפרשה‏נדרשת

Sokolnikiבדיקת‏עודף‏עלות‏-‏


‏השקעה‏בכללותהסכום‏בר‏השבה‏ .2.4

,הערכת השוויהטבלה שלהלן מציגה את הנכסים וההתחייבויות של בזיליקה )מאוחד( במועד

(:דולרים)כן, את שווים ההוגן ו

ביאורשווי‏הוגן‏ספרים‏

נכסים‏שוטפים

3,146,8093,146,809מזומנים ושווי מזומנים

א', ט',י'4,454,4624,272,084לקוחות וחייבים אחרים

ב'6,057,52411,874,000מלאי מקרקעין

נכסים‏לא‏שוטפים

ג'12,48212,482נכסים פיננסיים

ד'22,19422,194רכוש קבוע וציוד

4,224,2644,224,264מס נדחה

18,83518,835נכסים בלתי מוחשיים

ה'91,379,28389,499,000נדל"ן להשקעה

109,315,853113,069,668סה"כ‏נכסים

התחייבויות‏שוטפות

ו'3,250,9573,250,957ספקים וזכאים אחרים

ז'1,818,5681,818,568חוזה מכביד

ח'4,014,5814,014,581אשראי מתאגידים בנקאיים ומאחרים

ה'-309,192חכירה מימונית

התחייבויות‏לא‏שוטפות

ט'40,796,33240,796,332הלוואה מבעלי מניות

י'9,140,8592,528,814הלוואות מבעלי מניות לשעבר

160,999160,999הלוואות מחברות קשורות

יא', ב' י'13,498,37114,661,666עתודה למיסים נידחים

ה'-1,571,027חכירה מימונית

יב'40,062,52840,062,528הלוואות אחרות

1,851,0371,851,037פיקדון שוכרים

116,474,451109,145,482סה"כ‏התחייבויות

הון‏עצמי

(9,889,457)(19,529,755)הון עצמי )גרעון בהון( מיוחס לבעלי מניות

יג', ב'12,371,15713,813,643הון מיוחס לזכויות שאינן מקנות שליטה

3,924,186(7,158,598)סה"כ‏הון

109,315,853113,069,668סה"כ‏התחייבויות‏והון‏עצמי

סכום‏בר‏השבה,‏בזיליקה,‏ליום‏31‏בדצמבר,‏2012


‏ביאורים

‏ביאור‏א'

הטבלה שלהלן מציגה את פירוט יתרת לקוחות וחייבים אחרים )דולרים(:

22,297צדדים קשורים

182,378הלוואות לבעלי מניות לשעבר

240,563הלוואות לבעלי מניות

1,009,482פקדונות ומקדמות

2,122,323מע"מ

877,419חייבים אחרים

4,454,462סה"כ‏

לקוחות‏וחייבים‏אחרים‏

ראה בנוסף ביאור י'. -עבר לשהלוואות לבעלי מניות

ראה בנוסף ביאור ט'. -הלוואות לבעלי מניות

ולכן ערכן בספרים משקף יתרות לקוחות וחייבים אחרים עתידות להיפדות בזמן הקצר,

בקירוב את שוויין ההוגן.

‏ביאור‏ב'

הטבלה שלהלן מציגה את פירוט יתרת מלאי מקרקעין, כפי שמופיע בספרי בזיליקה

)דולרים(:

שווי‏הוגןערך‏בספריםמלאי‏מקרקעין

SOKOLNIKI6,057,52411,874,000

IMS Project Managementהשווי ההוגן של הקרקע נאמד בהתאם להערכת שמאי מקרקעין

LLC 2132בדצמבר, 13יום ל.

‏'גביאור‏

( שביצעה בזיליקה, בגין הלוואה שנטלה מתאגיד בנקאי swapה בגין עסקת החלף )יתרת חוב

"מכשירים פיננסיים הכרה - 12לזמן ארוך(. בזיליקה מיישמת את הכללים של תקן בינלאומי

ומדידה" ומציגה את הנגזרים הפיננסים בהתאם לשווים ההוגן.

‏'דביאור‏

יוד משרדי. להערכת הנהלת החברה, ערכו יתרת הרכוש הקבוע מורכבת בעיקר מריהוט וצ

של הרכוש הקבוע מייצג בקירוב את שוויו ההוגן.בספרים

‏'הביאור‏

מופיע בספרי בזיליקה שהטבלה שלהלן מציגה את פירוט יתרת נדל"ן להשקעה, כפי

)דולרים(:

ערך‏בספריםסעיף‏במאזןנדל"ן‏להשקעה

GOLYSTAIN5,606,000נדל"ן להשקעה + חכירה מימונית

DPK83,893,000נדל"ן להשקעה + חכירה מימונית

89,499,000סה"כ


ת שמאי ודל"ן להשקעה בספרים לפי שווי הוגן שנקבע על סמך הערכבזיליקה מציגה את הנ

.2132בדצמבר, 13ליום LLC IMS Project Managemet -ו knight Frank ZAO ןמקרקעי

‏'וביאור‏

הטבלה שלהלן מציגה את פירוט יתרת ספקים וזכאים אחרים )דולרים(:

97,906מיסים

2,703,051ספקים

450,000זכאים אחרים

3,250,957סה"כ‏

ספקים‏וזכאים‏אחרים

יתרות הספקים וזכאים אחרים עתידות להיפדות בזמן הקצר ולכן ערכן בספרים משקף


‏'זביאור‏

("פיירפורד" -)להלן .Fairford S.Aמהון המניות של 1.1%התחייבות של בזיליקה לרכוש

(, כך שלאחר השלמת הרכישה שיעור "סילק" -)להלן .Silk Investment Ltdמחברת

בדוחותיה הכספיים המבוקרים 23. בהתאם לביאור 01% -כ ההחזקה בפיירפורד יעמוד על

החוזה המכביד נאמדת ומוצגת על פי שוויה ההוגן בכל מועד של בזיליקה, ההתחייבות בגין

.2131בזיליקה צפויה לרכוש את יתרת המניות, כאמור, במהלך שנת דיווח כספי.

‏'חביאור‏

מההלוואות הבאות:בעיקרה יתרת אשראי מתאגידים בנקאיים ואחרים מורכבת

מהון 1.1%קה לרכוש דולר מחברת סילק, ממנה התחייבה בזילי 192,132הלוואה בסך של

בעת השלמת רכישת יוסב לבזיליקה' לעיל(, חוב זה ז ביאורהמניות של פיירפורד )ראה

המניות על ידי בזיליקה, עובדה שנלקחה בחשבון בעת מדידת שוויו ההוגן של החוזה

המכביד.

היתרה מייצגת חלות שוטפת של הלוואה -דולר 1,310,122הלוואה מבנקים בסך של

'(.בם לזמן ארוך )ראה ביאור ימבנקי

‏'טביאור‏

2132בדצמבר, 13להלן טבלה המציגה את פירוט יתרת ההלוואות, נטו מבעלי מניות ליום

)דולרים(:

בעלי‏מניות‏בבזיליקה‏אחוזי‏החזקה‏

בבזיליקה

הלוואות‏

מבעלי‏מניות

‏בניכוי‏הלוואות‏

שניתנו‏ישירות‏

לחברת‏פיירפורד

בניכוי‏

הלוואות‏

לבעלי‏מניות

סה"כ‏הלוואות,‏

נטו

הפרש‏בין‏החלק‏

היחסי‏בהלוואות,‏נטו,‏

לבין‏שיעור‏ההחזקה‏

בבזיליקהGenadi Goldenberg 11.65%5,041,221(157,746)(182,378)4,701,0970.15%

213 Holding Ltd32.37%14,419,138(237,587)-14,181,5513.25%

Elran (D.D.) Real Estate Ltd55.98%21,335,973(340,463)(58,185)20,937,325-3.40%

39,819,9730.00%(240,563)(735,796)100.00%40,796,332סה"כעל מנת לבחון את יתרות בעלי המניות בבזיליקה, ריכזנו את כלל היתרות בגין כל בעל מניות

לוואות שהעניקו בעלי המניות במישרין )יתרות חובה ויתרות זכות(, בנוסף נטרלנו את הה

לחברת פיירפורד. ניתן לראות כי החלק היחסי של כל בעל מניות ביתרת ההלוואות, נטו, שווה


בקירוב לשיעור החזקתו בבזיליקה ולפיכך, כל התאמה של הלוואות הבעלים תגרור התאמה

נגדית בספרי החברה המחזיקה בבזיליקה, אלרן נדל"ן במקרה דנן.

‏'יור‏ביא

עבר )דולרים(:לשהטבלה להלן מציגה את סך הלוואות, נטו, מבעלי מניות החברה

בעלי‏מניות‏לשעברהלוואות‏שניתנו‏

לבזיליקה

‏בניכוי‏הלוואות‏שניתנו‏

ישירות‏לחברת‏פיירפורד

בניכוי‏הלוואות‏שניתנו‏על‏

ידי‏בזיליקה‏לבעלי‏

המניות‏לשעבר

סה"כ‏

הלוואות,‏נטו

4,634,810(182,378)(651,808)5,468,996בעל מניות לשעבר 1

3,247,885(423,978)3,671,863בעל מניות לשעבר 2

7,882,695(182,378)(1,075,786)9,140,859סה"כבהתאם למידע שנמסר על ידי הנהלת החברה, ההלוואות, כאמור, תיפרענה בעת מכירת הנכס

DPK :ראה ביאור ה'( כמפורט להלן(

לפירעון כל ההתחייבויות הקיימות תשמש בתחילה DPKתמורת מימוש הנכס .3

בהתאם ל"חוזה היפרדות" אשר מגדיר ,, לרבות, הלוואות הבעלים בפיירפורדירפורדבפי

את סדר הנושים.

בה פירעון כל ההתחייבויות הקיימות לאחר מימוש כל הנכסים הקיימים בפיירפורד ו .2

חולק לכל בעלי המניות בפיירפורד, ת, יתרת הסכום הזמין לחלוקה לעיל( 3)סעיף

בהתאם לשיעור החזקתם.

חלק(, לעיל 2 בסעיףכאמור )ביתרת הסכום הזמין לחלוקה, בזיליקהחר קבלת חלק לא .1

בהתאם למתווה המופיע , בזיליקה יחולק בין בעלי מניותיה ובין בעלי המניות לשעבר

ההיפרדות.בחוזה

הלוואות הלעיל, יחשב כפירעון 1עבר, בהתאם לסעיף סכום שיקבלו בעלי המניות לשכל .9

.יקהלבזילאותן העמידו

שיתקבל בבזיליקה וישמש לפירעון הלוואות בעלי המניות לשעבר במידה שהסכום .1

, תימחקנה היתרה הבלתי במלואה (, לא ישרת את יתרת ההלוואותלעיל 9 -ו 1)סעיפים

מסולקת, ולא תהיה כל זכאות לכל תמורה חליפית כלשהיא למי מבין בעלי המניות

לשעבר.

.2131יימכר במהלך שנת DPK הנהלת החברה צופה כי הנכס

יתרת הסכום הזמין לחלוקה, לאחר מימוש כל הנכסים הקיימים בפיירפורד ופירעון כל

ההתחייבויות הקיימות בה, הינה ההון העצמי של פיירפורד במונחי שווי הוגן )ראה נספח א'(.

הטבלה שלהלן מציגה את חלק בזיליקה ביתרת הסכום הזמין לחלוקה )דולרים(:

24,997,274יתרת הסכום הזמין לחלוקה

54.90%חלק בזיליקה

13,723,503חלק‏בזיליקה‏ביתרת‏הסכום‏הזמין‏לחלוקה

חלק‏בזיליקה‏ביתרת‏הסכום‏הזמין‏לחלוקה


הטבלה שלהלן מציגה את חלקם של בעלי המניות לשעבר בבזיליקה ביתרת הסכום הזמין

)דולרים(: , בהתאם למתווה המופיע בחוזה ההיפרדותלחלוקה

2,183,112בעל מניות לשעבר 1

345,702בעל מניות לשעבר 2

2,528,814סה"כ

חלק‏בעלי‏מניות‏לשעבר‏ביתרת‏הסכום‏הזמין‏לחלוקה

‏'יאביאור‏

הטבלה שלהלן מציגה את העתודה למיסים נדחים )דולרים(:

סה"כייחוס‏מיסים‏ערך‏בספרים

13,498,3711,163,29514,661,666 היבטי המס ל ליתרות המאזניות הקשורותבחוות דעתנו, אין התייחסות - ערך בספרים

אשר נרשמו בספרים החשבונאיים, דהיינו, ייחוס מיסים נדחים )נכסי מס או עתודות למס(

ערכם בגין או בין רווח והפסד לצורכי מס ובגין הפרשי עיתוי בין רווח והפסד חשבונאי

בספרים ביחס לבסיס המס שלהם.

מקרקעין והלוואות מלאיהעתודה למס נדחה בגין את הטבלה שלהלן מציגה - ייחוס מיסים

דולרים(:מבעלי מניות לשעבר )

שווי‏הוגןערך‏בספריםסעיףהפרש‏בין‏ערך‏

בספרים‏לשווי‏הוגןמיסיםשיעור‏מס

6,057,52411,874,0005,816,47620%1,163,295מלאי מקרקעין*

-0%***(6,612,045)9,140,8592,528,814הלוואה מבעלי מניות לשעבר**

1,163,295סה"כ *ראה ביאור ב'.

**ראה ביאור י'.

בגין בבזיליקה ***הנהלת החברה מסרה, בהיוועץ עם יועציה המקצועיים, כי לא צפויה חבות מס

מחילת הלוואות בעלי המניות לשעבר.

‏'בביאור‏י

חודשים בתוספת מרווח בשיעור של 1ליבור אה, נושאת ריבית הלווהיתרה מורכבת בעיקרה מ

, במסגרת הרחבת מסגרת האשראי 2132, אשר ניטלה מתאגיד בנקאי במהלך שנת 0.1%

לפיירפורד.

והואיל והנהלת , 2132ותנאי ההלוואה, לרבות, הריבית הנקובה בה נקבעו במהלך שנת הואיל

מאפיינים את החברה סבורה כי לא חל שינוי משמעותי בתוכניות העסקיות ובסיכונים ה

פיירפורד בתקופה שחלפה ממועד נטילת ההלוואה ועד למועד הערכת השווי, הנחנו כי ערכה

בספרים מייצג בקירוב את שוויה ההוגן.

מהתמורה שתתקבל 2131, כי ההלוואה, כאמור, צפויה להיפרע במהלך שנת נציין בהקשר זה

)ראה בנוסף ביאור י'(. DPKממימוש הנכס

‏

‏


‏

‏'גביאור‏י

Tinor -ב 13% -הזכויות שאינן מקנות שליטה הינן בגין החזקת המיעוט בשיעור של כ

Maksi LLC חברה המחזיקה בנכס(Sokolniki ובגין החזקת המיעוט בשיעור של כ )- 11.3%

בפיירפוד.

הטבלה שלהלן מציגה את ההתאמות שבוצעו לזכויות שאינן מקנות שליטה בגין שיערוך הנכס

Sokolniki :)דולרים(

הפרששווי‏הוגןערך‏בספריםנכסהפרש,‏נטו‏

ממס

חלק‏המיעוט‏

באחוזיםהתאמות

SOKOLNIKI6,057,52411,874,0005,816,4764,653,18131.0%1,442,486 הטבלה שלהלן מציגה את השווי ההוגן של הזכויות שאינן מקנות שליטה )דולרים(:

12,371,157ערך בספרים

1,442,486התאמות

13,813,643סה"כ

זכויות‏שאינן‏מקנות‏שליטה

‏‏ריכוז‏ממצאים .2

)דולרים(: 2132בדצמבר, 13הטבלה שלהלן מציגה את סכום בר ההשבה של בזיליקה ליום

(9,889,457)סכום בר השבה

55.98%שיעור החזקת החברה

(5,536,252)סכום‏בר‏השבה‏-‏חלק‏החברה

סכום‏בר‏השבה,‏בזיליקה

, 2132בדצמבר, 13הטבלה שלהלן מציגה את הרכב ההשקעה של החברה בבזיליקה ליום

חר התאמות והפחתות נדרשות )דולרים(:לא

סה"כהתאמותספריםפרטים

(1,797,390)696,833(2,494,223)שווי מאזני

SOKOLNIKI 1,797,390(696,833)2,494,223עודפי עלות

4,925,8954,925,895מוניטין

(4,925,895)(4,925,895)הפרשה לירידת ערך מוניטין

(5,536,252)(110,098)(5,426,154)הפרשה נוספת לירידת ערך

(5,536,252)(110,098)(5,426,154)סה"כ



‏4104בדצמבר,‏‏20שווי‏הוגן‏פיירפורד‏ליום‏‏-נספח‏א'‏ .5

בדצמבר, 13הטבלה שלהלן מציגה את הנכסים וההתחייבויות של פיירפורד )מאוחד( ליום

(:דולרים)וכן, את שווים ההוגן ,2132

ביאורשווי‏הוגןערך‏בספריםנכסים‏שוטפים


א'2,929,6942,929,694לקוחות וחייבים אחרים


2,1812,181רכוש קבוע וציוד

ב'3,118,2363,118,236מס נדחה


ד'84,305,21083,893,000נדל"ן להשקעה

93,435,01193,022,801סה"כ‏נכסים

התחייבויות‏שוטופות

ה'3,236,2173,236,217ספקים וזכאים אחרים

ו'3,949,0443,949,044הלוואות

ד'-34,101חכירה מימונית


ז'7,782,7867,782,786הלוואות בעלי מניות

ח'39,793,58139,793,581הלוואות מבנקים


ב'11,412,86211,412,862עתודה למסים נדחים

1,851,0371,851,037פיקדון שוכרים

68,437,73768,025,527סה"כ‏התחייבויות

24,997,27424,997,274הון‏עצמי


שווי‏הוגן‏-‏פיירפורד‏31.12.2012

‏


‏ביאור‏א'

ייבים אחרים )דולרים(:הטבלה שלהלן מציגה את פירוט יתרת לקוחות וח

1,015,436הוצאות מראש

1,914,258מע"מ

2,929,694סה"כ

לקוחות‏וחייבים‏אחרים

יתרת הלקוחות וחייבים אחרים עתידות להיפדות בזמן הקצר, ולכן ערכן בספרים משקף


‏ביאור‏ב'

בחוות דעתנו אין התייחסות ליתרות המאזניות הקשורות להיבטי המס החשבונאיים, דהיינו,

ר נרשמו בספרים בגין הפרשי עיתוי בין ייחוס מיסים נדחים )נכסי מס או עתודות למס( אש

בגין ערכם בספרים ביחס לבסיס המס רווח והפסד חשבונאי ובין רווח והפסד לצורכי מס או

שלהם.

‏'גביאור‏

( שביצעה פיירפורד, בגין הלוואה שנטלה מתאגיד בנקאי swapיתרת חובה בגין עסקת החלף )

"מכשירים פיננסיים - 12בינלאומי לזמן ארוך(. פיירפורד מיישמת את הכללים של תקן

הכרה ומדידה" ומציגה את הנגזרים הפיננסים בהתאם לשווים ההוגן.

‏'דביאור‏

פיירפורדבספרי ההטבלה שלהלן מציגה את פירוט יתרת נדל"ן להשקעה, כפי שמופיע

)דולרים(:


84,305,210נדל"ן להשקעה

(34,101)חכירה מימונית ז"ק

(378,109)חכירה מימונית ז"א

83,893,000סה"כ

DPK

כת שמאי מציגה את הנדל"ן להשקעה בספרים לפי שווי הוגן שנקבע על סמך הער פיירפורד

.2132בדצמבר, 13ליום Knight Frank ZAOמקרקעין

‏'הביאור‏


5,039ספקים

1,779,840בעלי מניות

1,451,338זכאים אחרים

3,236,217סה"כ


יתרת הספקים וזכאים אחרים עתידות להיפדות בזמן הקצר, ולכן ערכן בספרים משקף


‏

‏


‏ביאור‏ו'

ר מורכבת מחלות שוטפת של הלוואה מבנקים )ראה ביאור ח'( יתרת ההלוואות לזמן קצ

ומהלוואות בעלים לזמן קצר. הלוואות הבעלים לזמן קצר תיפרענה בשנה השוטפת ולכן ערכן

בספרים שווה בקרוב לשוויה ההוגן.

‏'זביאור‏

ומועד פירעונן יחול בעת מכירת 32.1%הלוואות הבעלים נושאות ריבית שנתית בשיעור של

. )ראה ביאור ד' לעיל( DPKסהנכ

מתקיים משא ומתן מתקדם בין פיירפורד לבין צד נכון למועד הערכת השווי מסרה החברה כי

, 2131. הנהלת החברה צופה כי הנכס, כאמור, יימכר במהלך שנת DPKג' למכירת הנכס

לפירעון הלוואות הבעלים. , בין היתר,והתמורה ממימושו תשמש

לי המניות צפויות להיפרע בטווח הקצר, הנחנו כי ערכן בספרים משקף הואיל והלוואות בע


‏'חביאור‏

חודשים בתוספת מרווח בשיעור של 1ליבור אה, נושאת ריבית הלווהיתרה מורכבת בעיקרה מ

, במסגרת הרחבת מסגרת האשראי 2132, אשר ניטלה מתאגיד בנקאי במהלך שנת 0.1%

לפיירפורד.

והואיל והנהלת , 2132ותנאי ההלוואה, לרבות, הריבית הנקובה בה נקבעו במהלך שנת הואיל

החברה סבורה כי לא חל שינוי משמעותי בתוכניות העסקיות ובסיכונים המאפיינים את

פיירפורד בתקופה שחלפה ממועד נטילת ההלוואה ועד למועד הערכת השווי, הנחנו כי ערכה

ת שוויה ההוגן.בספרים מייצג בקירוב א

‏ריכוז‏ממצאים .5.0

)דולרים(: 2132בדצמבר, 13הטבלה שלהלן מציגה את השווי ההוגן של פיירפורד ליום

שווי‏הוגןמועד

31/12/201224,997,274

De-Kalo Ben-Yehuda & Co. Ltd. www.dbinv.com

Gibor Sport Building, 12th Fl., 7 Menachem Begin St., Ramat Gan 52681 Israel

Phone: +972-3-752-9000 Fax: +972-3-752-9002 [email protected]

‏4102מרץ,‏‏42‏

‏השקעה‏בחינת‏הצורך‏בירידת‏ערך

Fairford S.A‏‏

4104,‏בדצמבר‏20ליום‏

‏בע"מ‏נדל"ן‏אלרן


מנכ"ל, גדי דנקנרמר

בע"מ אלרן נדל"ן

הנכבד, דנקנרמר

אלרן חברת על ידי נתבקשה( "מעריך‏השווי" -להלן קלו בן יהודה ושות' בע"מ )-דה חברת

חברת ב ההשקעהירידת ערך בהכרה מהפסד לבחון את הצורך ("החברה"‏-להלן ) בע"מ נדל"ן

Fairford S.A ( פיירפורד" -להלן" ) 2132 בדצמבר, 13ליום .

זו מיועדת לצרכי עריכת דוחות כספיים והיא נערכה בהתאם לכללים ולהנחיות חוות דעת

הסתמכנו על חוות דעתנולצורך . IAS 28 -ו IAS 36שנקבעו בתקני חשבונאות בינלאומיים

והנהלת פיירפורדוכן על מידע שהתקבל מהנהלת בפיירפורדהקשורים נתונים פיננסיים

אחרים. ואומדנים נוספים לרבות, הערכות שמאים ,החברה

נדרש להכיר בהפסד מירידת ערךהאם , המובאת להלן, הינה לבחון חוות הדעתמטרת

,פיירפורדיחידה מניבת המזומנים, ההשבה של סכום בריינו, האם , דהירפורדבפי ההשקעה

.בספריםערכה מ קטן

ירידת הפסד מהכרה בבהצורך לבחון אתלסייע להנהלת החברה נערכה על מנתזו חוות דעת

ולמטרה זו בלבד. הדיווח הכספי בספריהלצורך , כאמור לעיל,השקעתה בפיירפורד ערך

לא יוכל שלישיצד וכן מטרות אחרות ולא תופץ לגוף שלישיזו לא תשמש ל דעתחוות לפיכך,

לעשות בה שימוש כלשהו או להסתמך עליה לכל מטרה שהיא ללא אישורינו מראש ובכתב.

13דוחות כספיים מבוקרים ליום עיון בנתונים פיננסיים היסטוריים, התבססה עלעבודתנו

הערכות על , האחראים לעניינים הכספיים והחשבונאיים עריכת בירורים עם ,2132בדצמבר,

דיונים, אשר ועל שהתקבלו מהחברה, פיירפורדשמאים הקשורות בנכסי הנדל"ן שבבעלות

. םבהתבסס על מיטב ידיעתם וניסיונ ,ערכנו עם עובדים בכירים ונושאי משרה אחרים בחברה

דיקה או בחינה ם לא ביצענו כל בנראים לנו כאמינים, שלמים ועדכניים, אולהמידע מקורות

על מנת לאמת את הנתונים, כאמור. עצמאית בלתי תלויה

ככל הערכת שווי כלכלית, אף הערכה זו התבססה על המידע האמור. שינויים במידע זה, או

משום אימות בחוות דעתנו. לפיכך, אין לראות יהמידע נוסף, עשויים להשפיע, על תוצאות

שלמותם או דיוקם של נתונים אלו, אלא הערכה כלכלית המבוססת על כלשהוא לנכונותם, ל

. להלן חוות הדעתמודלים כלכליים כמפורט בגוף


להלן מתייחסת למכלול הפרמטרים הכלכליים ש השקעה,בחינת הצורך בירידת ערך

ואין בה משום המלצה לפעולה בלבדפיירפורד של סכום בר ההשבההקשורים בקביעת

נסי כלשהוא.פינ מכשירת המלצת השקעה בכלשהיא, לרבו

הרינו להצהיר, כי אין לנו כל עניין אישי במניות החברה, בעלי מניותיה או צדדים קשורים

להן, כמוגדר בדין או בפסיקה ולא מתקיימת בנו כל תלות או זיקה אליהם או לצדדים

.בחוק החברותקשורים אליהם כהגדרתם

את הנהלת החברה לשם הדיווח הפיננסי הנדרש במסגרת ידוע לנו כי ממצאינו ישמשו

אנו מסכימים כי חוות דעת זו תיכלל בדוח .העקרונות החשבונאיים המקובלים בישראל

לצרכי תשקיף וכן בדיווחיה לרשות לניירות ערך אם תידרש לכך. ,הכספי של החברה, לרבות

בהפרשה לירידת ערך בחינת הצורךאנו מעריכים את ההזדמנות לסייע לכם בקשר עם

. במידה שדרושות לכם הבהרות בנוגע לכל אחד מהנושאים הכלולים בפיירפורד תכםהשקע

‏במידה שתידרש לכם. ה, או כל מידע נוסף, נשמח להרחיבבחוות דעתנו


‏)דולרים(‏ריכוז‏ממצאים

24,997,274סכום בר השבה

10.42%שיעור החזקה של החברה

2,604,716סכום בר השבה - חלק החברה


-הפחתה‏נדרשת‏

ריכוז‏ממצאים


‏ים‏והשכלתם‏רטי‏המומחפ

‏פולברניס ‏שי בחשבונאות מאוניברסיטת בן בכלכלה עם התמחות B.A בעל תואר - רו"ח,

גוריון. מחזיק רישיון ישראלי לראיית חשבון.

בכלכלה עם התמחות בחשבונאות מאוניברסיטת בן גוריון. B.Aבעל תואר - רו"ח,‏ערן‏ברקת

מחזיק רישיון ישראלי לראיית חשבון.

‏המקצועי‏של‏מעריכי‏השווי‏םפרטי‏ניסיונ

תחום הערכות שווי , בעל ניסיון עשיר ב2112שנת מ מנהל המחלקה הכלכלית - פולברניס‏מר

והייעוץ הכלכלי.

הייעוץ הכלכלי ובמחלקת בתחום עבד מספר שנים בתחום הביקורת, מר פולברניסלפני כן,

ובמהלכן (, PricewaterhouseCoopers) מיזוגים ורכישות במשרד רו"ח קסלמן את קסלמן

ותף בליווי עסקאות משמעותיות במשק הישראלי. היה ש

תחום בעל ניסיון עשיר ב, 2112מנהל מקצועי ובכיר במחלקה הכלכלית משנת - ברקת‏מר

הערכות שווי והייעוץ הכלכלי.

גבאי את פורר-קוסט שנים בתחום הביקורת במשרד רו"ח, עבד מספר מר ברקתלפני כן,

ל תיקי ביקורת של חברות וניהימש כמנג'ר בש, במהלכן (ERNST & YOUNGקסירר )

ציבוריות מהגדולות והמובילות במשק הישראלי וביצע בדיקות נאותות בתחום המיזוגים

והרכישות.

בין היתר, שימש מר ברקת כמומחה וכיועץ בהיערכות למעבר לדיווח לפי כללי ותקני

ומם המוקדם., לרבות מתן יעוץ לחברות בדבר יישIFRSחשבונאות בינלאומיים

בכבוד רב,

שי פולברניס, רואה חשבון

_______________________


םענייניתוכן‏

7‏רקע .0

8‏מתודולוגיה .4

01‏השבה‏בר‏סכום‏הערכת‏תמצית .2

31 השקעה הרכב .1.3

33 השבה בר סכום .1.2

02‏ממצאים‏ריכוז .2.2

‏


‏רקע .0

עוסקת בתחום הנדל"ן , ואשרהרשומה בקפריסין ,הינה חברה בבעלות פרטית פיירפורד

, AM Building Center CJSCחברת פיירפורד מחזיקה בבעלות מלאה בחברה רוסית .היזמי

ומסחר במרכז מבנה משרדיםאשר מחזיקה במלא הזכויות לביצוע פרויקט יזמי להקמת

( ראה פירוט להלן.Dom Park Koltura Projectמוסקבה )

Dom Park Koltura Project011 -פרויקט להקמת מבנה משרדים על מגרש בגודל של כ -‏

מ"ר בשדרות זובובסקי במרכז העיר מוסקבה.

, בעלת זכויות AM Building Center CJSCרויקט מבוצע על ידי חברה רוסית, מבנה הפ

קומות 30שנים בשטחי הפרויקט מרשויות מוסקבה. המבנה כולל 94חכירה ארוכות טווח של

אלפי מ"ר, מתוכו יהיה ניתן 8.8 -מעל פני הקרקע ושתי קומות מרתף בשטח כולל של כ

בניית הפרויקט הושלמה והוא מושכר לחברת תעופה אלפי מ"ר. 8.8 -להשכיר שטח של כ

. 2133 ,רוסית טרנסארו מחודש נובמבר

‏

‏

311%

04% 311%

311%

311%


‏‏ולוגיהודמת .4

, קובעים נהלים שעל ישות ליישם IAS 36 -ו IAS 28 ,IAS 39, תקני חשבונאות בינלאומיים

ה השקעה בחברכדי להבטיח שנכסיה לא יוצגו בסכום, העולה על הסכום בר ההשבה שלהם.

, נכס או יחידה מניבת מזומנים מוצגים בסכום, הגבוה מסכום בר ההשבה שלהם, כלולה

כאשר ערכם בספרים עולה על הסכום שיתקבל מהשימוש בהם או ממכירתם. במקרה זה חלה

.ירידת ערך והישות נדרשת להכיר בהפסד מירידת ערך

IAS 36 של נכס או לויות מכירההשווי ההוגן בניכוי עמגדיר סכום בר השבה כגבוה מבין

בהם. דהיינו, במקרה בו השווי ההוגן או שווי שווי השימושלבין ,יחידה מניבת מזומנים

השימוש, או שניהם גבוהים מהערך הפנקסני, לא נדרשת הישות להכיר בהפסד מירידת ערך.

IAS 36 ‏בקביעת ,אף קובע את ההיררכיה, להלן בסדר יורד ‏עלויות‏ההשווי ‏בניכוי הוגן

:מכירה

הראיה הטובה ביותר לשווי ההוגן בניכוי עלויות מכירה של נכס היא המחיר שנקבע

בהסכם מכירה מחייב בעסקה בין קונה מרצון למוכר מרצון הפועלים בצורה

מושכלת, מותאם בגין עלויות תוספתיות שניתן ליחסן במישרין למימוש הנכס.

כאשר אין הסכם מכירה מחייב אך הנכס נסחר בשוק –מחיר מכירה בשוק פעיל

פעיל, השווי ההוגן בניכוי עלויות למכירה, יהיה מחיר השוק של הנכס בניכוי עלויות

המימוש.

מידע זמין המשקף את הסכום שישות היתה יכולה לקבל, בתאריך המאזן, תמורת

מושכלת.מימוש הנכס בעסקה בין מוכר מרצון לקונה מרצון הפועלים בצורה

:אומדת ישות ,ההשקעה של השימוש שווי בקביעת IAS,28בהתאם לתקן בינלאומי

שיופקו חזוי אשר ,העתידיים המזומנים תזרימי אומדן של הנוכחי בערך חלקה את

הכלולה החברה של מהפעילויות המזומנים תזרימי כולל ,הכלולה החברה ידי על

ההשקעה. של הסופי ממימושה והתמורה

ינבעו כי חזוי אשר, העתידיים המזומנים תזרימי אומדן של הנוכחי הערך אתאו

.הסופי ומהמימוש מההשקעה שיתקבלו מדיבידנדים

‏.בהנחות‏מתאימות‏שתי‏השיטות‏יביאו‏לתוצאה‏זהה

‏

‏

‏

‏


לשם היוון תזרים המזומנים העתידי למועד בדיקת ירידת הערך יש לקבוע את מחיר ההון

לשקף הערכות שוק שוטפות של ערך הזמן של קה. שיעור הניכיון נועד המאפיין את נשוא הבדי

הכסף וכן את הסיכונים הספציפיים, אשר בגינם לא הותאמו האומדנים של תזרימי

Weighted Average Cost Of-המזומנים העתידיים. מחיר ההון מחושב באמצעות מודל

Capital (WACC)מון אשר נקבע להלן:, דהיינו, ממוצע משוקלל של מקורות המי

WACC=Ke*E/V+Kd*(1-T)*D/V

כאשר:

E- .הינו שווי האקוויטי של הפעילות במונחי שווי שוק, אשר נקבע באופן איטרטיבי

D- .הינו שווי השוק של החוב הפנקסני

V – (E+D )– החברהשווי השוק של כלל מקורות המימון של.

Ke- ברמת סיכון דומה. יותבעלי מנהינו שיעור התשואה הנדרש על ידי

Kd- של החברה.הינו מחיר החוב, הנקבע על ידי ממוצע משוקלל של מקורות החוב הפיננסים

T- שחל על החברה.שיעור המס האפקטיבי לטווח ארוך

נקבע כדלקמן: ההון העצמיחישוב התשואה על

Ke=Rf+*(Rm-Rf)+P

Rf- חסרת סיכון ריאלית בישראל הינו שיעור הריבית חסרת הסיכון. כאומדן לריבית

השתמשנו בתשואה לפדיון של גליל )אגרת חוב ממשלתית צמודת מדד(.

- מקדם הסיכון היחסי. מקדם זה משקף את הסיכון היחסי הכרוך בהשקעה מסוימת

הביטא הינה ומבוסס על רמת המתאם בין תשואת ההשקעה עם תשואת שוק ההון כולו.

החברה.של המדד לסיכון "הסיסטמטי"

רגישות גבוהה לשינויים במצב השוק )קרי, במקרה של לעסק, 3-כאשר מקדם זה גדול מ

מיתון יושפע הענף לרעה יותר מענפים אחרים, ובמקרה של שגשוג יושפע הענף לטובה יותר

.מהממוצע לשינויים במצב השוק יותררגיש העסקשווי (, וכפועל יוצא,מענפים אחרים

(Rm-Rf)- רמיית הסיכון הממוצעת, פרמיה זו נקבעת כהפרש בין תשואת השוק לבין הינה פ

הריבית הריאלית חסרת הסיכון.

P – שיעור תשואה נוסף, המשקף סיכון ספציפי, לרבות, פרמיה נוספת הנדרשת במקרה של

העדר סחירות וגודל.


‏סכום‏בר‏השבהתמצית‏הערכת‏ .2

נכסים מוחשיים, ותבעלרכת שווי חברות המתודולוגיה המתאימה והמקובלת ביותר להע

החברהשיטה זו מתבססת על שווי נכסי , הינה שיטת השווי הנכסי. כדוגמת חברות נדל"ן

יכול שתיעשה תוך ביצוע הבדיקה. המשתקפים במאזנ ם, כפי שההבניכוי התחייבויותי

התאמות ותיקונים, בניסיון לאמוד את שווי השוק של הנכסים וההתחייבויות.

בעבודתנו, בחרנו ליישם את שיטת השווי הנכסי על מנת לאמוד את סכום בר ההשבה של

השקעת החברה בפיירפורד.

‏הרכב‏השקעה .2.0

:2132, בדצמבר 13ליום בפיירפורד להלן טבלה המפרטת את הרכב ההשקעה

24,997,274הון עצמי פיירפורד ליום 31 בדצמבר, 2012

10.42%שיעור ההחזקה של החברה

2,604,716שווי מאזני

2,604,716סה"כ‏השקעה



סכום‏בר‏השבה .2.4

בדצמבר, 13ליום הטבלה שלהלן מציגה את הנכסים וההתחייבויות של פיירפורד )מאוחד(

(:דולרים)וכן, את שווים ההוגן ,2132

ביאורשווי‏הוגןערך‏בספריםנכסים‏שוטפים


א'2,929,6942,929,694לקוחות וחייבים אחרים


2,1812,181רכוש קבוע וציוד

ב'3,118,2363,118,236מס נדחה


ד'84,305,21083,893,000נדל"ן להשקעה

93,435,01193,022,801סה"כ‏נכסים

התחייבויות‏שוטופות

ה'3,236,2173,236,217ספקים וזכאים אחרים

ו'3,949,0443,949,044הלוואות



ז'7,782,7867,782,786הלוואות בעלי מניות

ח'39,793,58139,793,581הלוואות מבנקים


ב'11,412,86211,412,862עתודה למסים נדחים

1,851,0371,851,037פיקדון שוכרים

68,437,73768,025,527סה"כ‏התחייבויות

24,997,27424,997,274הון‏עצמי


סכום‏בר‏השבה‏-‏פיירפורד‏31.12.2012

‏


‏ביאור‏א'

הטבלה שלהלן מציגה את פירוט יתרת לקוחות וחייבים אחרים )דולרים(:

1,015,436הוצאות מראש

1,914,258מע"מ

2,929,694סה"כ

לקוחות‏וחייבים‏אחרים

יתרת הלקוחות וחייבים אחרים עתידות להיפדות בזמן הקצר, ולכן ערכן בספרים משקף


‏ביאור‏ב'

להיבטי המס החשבונאיים, דהיינו, ליתרות המאזניות הקשורות אין התייחסות בחוות דעתנו

בגין הפרשי עיתוי בין אשר נרשמו בספרים ייחוס מיסים נדחים )נכסי מס או עתודות למס(

בגין ערכם בספרים ביחס לבסיס המס בונאי ובין רווח והפסד לצורכי מס אורווח והפסד חש

שלהם.

‏'גביאור‏

( שביצעה פיירפורד, בגין הלוואה שנטלה מתאגיד בנקאי swap)יתרת חובה בגין עסקת החלף

"מכשירים פיננסיים - 14לזמן ארוך(. פיירפורד מיישמת את הכללים של תקן בינלאומי

הכרה ומדידה" ומציגה את הנגזרים הפיננסים בהתאם לשווים ההוגן.

‏'דביאור‏

פיירפורדבספרי היעהטבלה שלהלן מציגה את פירוט יתרת נדל"ן להשקעה, כפי שמופ

)דולרים(:


84,305,210נדל"ן להשקעה

(34,101)חכירה מימונית ז"ק

(378,109)חכירה מימונית ז"א

83,893,000סה"כ

DPK

מציגה את הנדל"ן להשקעה בספרים לפי שווי הוגן שנקבע על סמך הערכת שמאי פיירפורד

.2132בדצמבר, 13ליום Knight Frank ZAOמקרקעין

‏'הביאור‏


5,039ספקים

1,779,840בעלי מניות

1,451,338זכאים אחרים

3,236,217סה"כ


ות להיפדות בזמן הקצר, ולכן ערכן בספרים משקף יתרת הספקים וזכאים אחרים עתיד



‏'וביאור‏

'(ח)ראה ביאור חלות שוטפת של הלוואה מבנקיםמ מורכבתיתרת ההלוואות לזמן קצר

השוטפת ולכן ערכןנה בשנה רעהלוואות הבעלים לזמן קצר תיפ .קצרלזמן הלוואות בעלים מו

ההוגן.בספרים שווה בקרוב לשוויה

‏'זביאור‏

ומועד פירעונן יחול בעת מכירת 32.8%שנתית בשיעור של הלוואות הבעלים נושאות ריבית

.)ראה ביאור ד' לעיל( DPKהנכס

צד מתקיים משא ומתן מתקדם בין פיירפורד לבין נכון למועד הערכת השווי מסרה החברה כי

, 2131ר, יימכר במהלך שנת . הנהלת החברה צופה כי הנכס, כאמוDPKג' למכירת הנכס

לפירעון הלוואות הבעלים. , בין היתר,והתמורה ממימושו תשמש

הואיל והלוואות בעלי המניות צפויות להיפרע בטווח הקצר, הנחנו כי ערכן בספרים משקף


‏'חביאור‏

מרווח בשיעור של חודשים בתוספת 1ליבור , נושאת ריבית האהלוובעיקרה מהיתרה מורכבת

, במסגרת הרחבת מסגרת האשראי 2132במהלך שנת מתאגיד בנקאי ניטלהאשר ,0.8%

לפיירפורד.

והואיל והנהלת , 2132 שנת במהלך תנאי ההלוואה, לרבות, הריבית הנקובה בה נקבעווהואיל

סיכונים המאפיינים את תוכניות העסקיות ובהחברה סבורה כי לא חל שינוי משמעותי ב

ועד למועד הערכת השווי, הנחנו כי ערכה ההלוואה נטילתירפורד בתקופה שחלפה ממועד פי

בספרים מייצג בקירוב את שוויה ההוגן.

‏ריכוז‏ממצאים .2.2

)דולרים(: 2132בדצמבר, 13הטבלה שלהלן מציגה את סכום בר ההשבה של פיירפורד ליום

24,997,274סכום בר השבה

10.42%שיעור החזקה של החברה

2,604,716סכום בר השבה - חלק החברה


-הפחתה‏נדרשת‏

ריכוז‏ממצאים

‏

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