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Russian Real Estate Investment FundRussian Real Estate Investment Fund(specialized in rent)(specialized in rent)

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Approaches on doing business in Russian real estate market

purchase of real estate with the following resale it at the better price acquiring property and getting income from the lease payments land purchase, construction and development with following sale of complete objects

REIT is the best solution to carry out all these types of business

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Rent REIF

Objectives

Commercial real estate property control optimization as well as protection of property against hostile takeover

Unit holders

Real estate owners Investors – external financing

Term

From 3 to 15 years with possible prolongation

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Advantages

Totally legal tax reduction by 80 -100 %!

No profit tax and property tax!

Possibility to reinvest the Fund income tax payment before the moment of unit

redemption – deferred taxation!

Securitization of different assets, combining them into unified property pool with

rights proved by the securities!

Possibility of staged quitting the project on the rims for the reregistration property

rights – unit as a security increases liquidity of assets!

Possibility of intermediate income payment (same as dividend)!

Possibility to set up a new object into the Fund without withdrawing cash out of

Fund upon completion of one project. In such case the term of the fund could be

prolongated!

Property protection from claims by third parties and raiders!

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Multilevel protection of investor’s rights

Activity of all Fund’s participants is carried out on the authority of the licences

Asset Management Company performance monitoring is carried out by : Inner controller of the Asset Management Company Specialized depositary Auditor State regulatory authority – the Federal Financial Markets Service

Management, register and custody functions are divided between the Asset Management Company and Specialized depositary

Fund’s property is registered by the Asset Management Company on the special balance and individual record is carried out

The Fund does not respond by it’s property for debts of the Asset Management Company

Legally speaking participation in the Russian Real Estate Investment Fund is equal to actual real estate possession

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Tax advantages

Increment of property value inside the Fund is exclusive of profit tax

Investor pays profit tax only in case of:

Receiving income of redemption or sale of investment units;

Receiving of intermediate income of Fund’s trust management

Property depositing by the time of Fund establishment is exclusive of VAT.

By the Russian Real Estate Investment Fund establishment asset writes off the balance of the Trust Management founder. Unit (as a security) is given in return. The asset is no longer subject to the Property tax. Asset Management Company is not the property taxpaying agent, the Fund is not a taxpayer either in virtue of article 378 chapter 30 of the Tax Code of Russian Federation.

Asset Management Company is a tax payee as for the estimation, deduction and transfer of the personal income tax to the budget

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Tax rates

Tax rates for the unit possession in Russia: • resident individual 13 %, • non-resident individual 30 % • resident legal body 24 % (Asset Management Company isn’t a tax payee).• non-resident legal body without representation office in Russia (Asset Management Company is a tax payee).• Asset Management Company doesn’t estimate and deduce profit tax of the foreign companies, doesn’t perform it’s activity in Russia through permanent establishments in case of :

- Payment of incomes which in accordance with the Double Taxation Convention are not liable for taxes in Russia

- Provision of the Asset Management Company with the confirmation of the foreign company’s permanent residence being in the state, which enters an international treaty with Russia, before the date of tax payment.

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Unit holders participation in Fund management

Limitation of Asset Management Company’s rights on activity with the Fund’s assets by the means of unit holders reconciliation procedure. Fund’s activity control by general meeting of unit holders:

Decision making concerning Fund Investment Declaration changes

Amount and date of acquisition of intermediate income confirmation

Pre-term termination of Fund’s activity or change of the Asset Management Company

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Rent REIF.Stages of establishment.

Fund Regulation’s setting up by the Asset Management Company. Making contract with Specialized Depositary, Registrar, Auditor and

Appraiser.

2 weeks

Registration of the Fund Regulation Rules in the Federal Financial Markets Service.

1 month

Fund establishment: Asset Management Company acceptance of the investment unit’s

acquisition orders from the legal entities and individuals. Cash and/or property contribution to the Fund for the investment units

until the Fund reaches the amount defined by the Regulation Rules : - Assessment of property by the Appraiser of the Fund; - Property transfer registration in the Agency of the real estate business registration

Up to 6 months

(ultimate tight schedule is possible)

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Rent REIF. Operational scheme.

Lease Closed-ended Mutual Fund

Investors – unit holders

The FounderInitial unit holder,100%

AMC

Object № 1

Developmentcompany

Lease holders

Unit holders of the Mutual Fund

Commercialproperty in assets

Fund’s filling

during establishment

Upgrading

Closed-ended Mutual Fund management

Contract of lease

or real estate management

Propertymanagement

Rentpayments

Leasepayments

net ofoperational

costs

Stockmarket

Bankdeposit

Real Estate Construction

Possible investment directions of the Closed-ended Mutual fund income

«Dividends» of the unit holders

inve

stm

ent

Sale of units

Object № 2

Object № 3

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Rent REIF.How-to scheme.

Gross income from lease of the building amounts to $ 5 Mio a year. Building self-cost is $ 25 Mio.The overall area 10 000 м2 (8 000 м2 – useful area which brings income from lease).Expenses incidental to operation and running of the building amounts to $ 200 000 a year.

Net rent a year $ 625 per 1 м2 Total $ 5 Mio

Marketable value $ 2500 per 1 м2 Building entirely $ 25 Mio

Book value (understated) $ 1500 per 1 м2 Building entirely $ 15 Mio

Index Companies Mutual FundGross income, $ 5 000 000 5 000 000

Management expenses, $ 200 000 200 000Commission for Fund management (1%

net asset value a year), $- 250 000

Gross profit, $ 4 800 000 4 550 000Property income (2,2%), $ 330 000 -

Profit tax (24%), $ 1 072 800 -Net profit, $ 3 397 200 4 550 000

Spread: $ 1 152 800 (24,02% of gross income)

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Contact us

Chairman of the Board Lazareva Natalia info@neofitous.ru

Director GeneralProject managers

Brut Olesya Morozova Elena Kuchinsky Vladimir

brut@neofitous.rumorozova@neofitus.ru vkuchinsky@neofitus.ru

Phone +7 (495) 727-35-70, +7 (495) 235-52-51, +7-800-200-52-51

123104, Moscow, Maliy Palashevsky, 550 meters from Pushkinskaya metro station

www.neofitus.ru