Бизнес-план девелоперского проекта курорта в Камбодже

1 2015 BUSINESS PLAN MORAKOT ISLAND PROJECT DEVELOPMENT

2 MORAKOT ISLAND PROJECT DEVELOPMENT NATURE AND SIZE OF PROPOSED DEVELOPMENT MANAGEMENT TEAM PROJECT INVESTMENT BUDGET 4 10 16 18 The Investment Opportunity Key success factors making this opportunity unique Major Highlights Capital raise – Tranche 1 - $31,1 million Capital raise – Tranche 2 - $21,8 million Project Description Accessibility Mainland Development: Hawaii Beachmorakot Development On Koh Puos Island Strong Location International Hotel Operators Planning Project Director Fractional Consulting Team Other Professionals Money Invested To Date Cost of Main Construction Project Schedule TABLE OF CONTENTS

3 COUNTRY PROFILE: CAMBODIA CAMBODIA TOURIST INDUSTRY ANALYSIS FRACTIONAL CONCEPT OF THE PROJECT 21 26 33 General Overview Political Overview Economic Overview Dynamic Emerging Tourism Market Introduction Tourism Arrivals Airport Traffic Seasonality Tourism Arrivals by Geographic Origin Purpose of Travel Gaming The Most Promising Focus Advantages of the Luxury Fractional Ownership Segment The Morakot Island Private Residence Club Ownership Structure Overall Structure Number Of Owners Per Unit The Reservation System The Registry Collection The Fractional Multiplier

4 MORAKOT ISLAND PROJECT DEVELOPMENT THE INVESTMENT OPPORTUNITY This is an offering of a loan in the amount of $52.9 million in the Morakot Island development. The Tranche 1 - $31.1 million will be a debt which can be converted into equity at agreed upon time in consideration of a 20% interest in the project. The debt will bear interest at 8% paid quarterly in arrears. The Tranche 2 - $21.8 million is a loan which will bear interest at 6% paid quarterly in arrears. KEY SUCCESS FACTORS MAKING THIS OPPORTUNITY UNIQUE The Cambodian market is entering a substantial growth phase and the Cambodian government is dedicated to supporting any ambitious project able to promoteCambodia as a new active luxury tourist destination generally, and specifically to the Morakot Island project. • There are no more islands suitable for a resort building in Cambodia, accessible by land transport; • Considerable investments have already been made; • Tourism arrivals to Cambodia grow substantially every year; • The resort hotels will be operated by international hotel brands (MOU are signed); • Use of the Fractional Model will expedite repayment of investment; • The Fractional Model of the project was developed by an experienced international team of consultants. MAJOR HIGHLIGHTS Developer investment to date: $129,8 MILLION Total project cost: $488,2 MILLION Estimated revenues – real estate sales: $1140 MILLION Estimated revenues hotel operations: $723,3 MILLION Net profit after debt service: $823,4 MILLION

5 CAPITAL RAISE – TRANCHE 1 - $31,1 MILLION Drawdown of funds Amount Date $2 400 000 1.2016 $6 800 000 2.2016 $6 200 000 3.2016 $7 300 000 4.2016 $6 300 000 5.2016 $2 100 000 6.2016 Repayment of funds in accordance with the following schedule: Amount Date $ 4 500 000 7.2016 $ 4 200 000 8.2016 $ 1 000 000 9.2016 $ 1 300 000 10.2016 $1 500 000 11.2016 $700 000 12.2016 $ 8 300 000 1qrt. 2017 $9 600 000 2qrt. 2017 CAPITAL RAISE – TRANCHE 2 - $21,8 MILLION Drawdown of funds Amount Date $ 9 400 000 4 qrt. 2017 $12 400 000 1qrt. 2018 Repayment of funds in accordance with the following schedule: Amount Date $12 100 000 2qrt. 2018y. $ 7 500 000 3qrt. 2018y. $ 2 200 000 4qrt. 2018y.

6 PROJECT DESCRIPTION The Morakot Island development on Koh Puos Island is a unique luxury residential and resort project, occupying an area of no less than 116 ha. The total area of the island, fully owned by the project company, is circa 120 hectares and the construction area is approximately 58 ha. The project is the most significant development to pioneer the tourism industry on the coast of Cambodia. The Morakot Island project encompasses the development of: • A 475-room 4-Star casino hotel on the Cambodian mainland close to the coastal town of Sihanoukville ; • Three hotels on with a total room count of 575 keys on Koh Puos Island,including a 150-room luxury beach hotel, a 175-room super-luxury boutique hotel on Koh Puos Island, and 250-room Marina Village Apartment complex. In addition, the concept calls for the integration of 578 residential units in the form of luxury villas, bungalows and apartments within the island leisure resort. Koh Puos (Cambodia) Investment Group Ltd (KPIG), a privately held real estate development and investment group, has purchased for this purpose the exclusive land use rights of the Koh Puos Island from the Cambodian government for a leasehold term of 99 years. Koh Puos Island is located in the Gulf of Siam, 950 meters off the southern coastline of Sihanoukville, Cambodia. KPIG intends to develop Koh Puos Island and 6 hectares on the adjacent mainland into a multi-purpose destination of the highest international standards. It is also expected to increase the beach width by 8 ha and thus to enlarge the whole land property area of the Morakot project. Koh Puos Island and the Cambodian mainland are connected by a newly opened 985-meter-long private bridge (Figure 1), which benefits from a renewable lease. The bridge was constructed by KPIG to improve the transport accessibility of the Morakot development project. It creates individuality and adds significant value to the project. In terms of ancillary facilities and guestamenities, the Morakot Island master plan facilities mix includes a spa and wellness center, a marina yacht club, a conference center, a sports center, a beach club, a children’s fun area, an internationally renowned casino, retail promenades, restaurants, bars, cafes, open air entertainment facilities and parking. The total estimated buildable area is around 320 thousand sq. m. (excluding landscaping) with a total project cost of approx. $488,2 million. Approximately $129,8 million in equity funds have already been invested in land acquisition, infrastructure development and initial construction. EDSA – a recognized master planner and architects – has been appointed to finalize the master plan and landscaping, while FSC and Ground Kents architects have been approved by the hotel brands to work on the design and planning of the resort. The project is planned to be branded and managed by renowned global hotel

7 FIGURE №1 operators. Besides, KPIG Ltd. has established a team of internationally experienced professionals to assist in delivering the project. ACCESSIBILITY The Morakot Island project has a wide range of accessible transport options so that everyone can get around. Roads. Currently, the city of Sihanoukville is accessible by vehicular access from Phnom Penhto Sihanoukville either via Kampot Province. From Phnom Penh, the journey takesapproximately four hours. The major motorway axis linking Sihanoukville to the restof Cambodia and beyond are listed below: • National Road 4 (NR4): Phnom Penh and Sihanoukville are connected by the National Road 4. The road has been built especially for the transport of merchandise between the capital and the port by heavy trucks and containers. • National Road 3 (NR3): connects Sihanoukville to Kampot province. The road joins the NR4 at Prey Nob district. It is paved and in a relatively good condition. • National Road 48: connects Sihanoukville and Phnom Penh with Koh Kong Province, to the southwest of Cambodia. The road joins also the Thai-Cambodian border. On June 2, 2015 the opening ceremony of Cambodia Road No. 41 built by China Road & Bridge Corporation (CRBC) with the concessional loan from the Chinese government was held in Kampong Speu Province. Cambodia National Road No. 41, located in Kampong Speu Province and Kampot Province, is 95.252 km long. The construction officially started in November, 2011 and the final inspection certificate was gained in June, 2015. As an important component of Cambodia Central Southern Road Network, Road No. 41 connects Cambodia National Road No. 4 and National Road No. 3 and is an important channel to the southern coastal cities and ports from the cities in

8 Cambodia like Phnom Penh. China is providing increased funds for building and repairing Cambodian roads, and for water and land transportation projects. China has been funding construction of national roads to Cambodia’s key land border crossings, Bavet and Poipet. The former links the Kingdon with Vietnam while the latter connects it to Thailand. China is also working on the road from the Cambodia’s capital to its largest port city, Sihanoukville. The “One Belt, One Road” project – which includes the “Silk Road Economic Belt” and the “21st Century Maritime Silk Road” initiatives – will connect China with countries across Asia, Europe and Africa. It will be especially visible in Mekong Region countries: Thailand, Laos, Vietnam and Cambodia. Commercial, trade, tourist, regional and sub-regional cooperationand connectivity between countries located along the belt will be enhanced. According to Chinese sources, the “One Belt, One Road” model has already been put into place in Cambodia, with an estimated 4,000 kilometers of roads. In early April, 2015 was opened to traffic NeakLoeung Bridge with the official name of «SubasaBridge» which reflects the close Cambodia-Japan friendship. Located in NeakLoeung town about 61 kilometers southeastof Phnom Penh, NeakLoeungBridge is built across the Lower Mekong River. It is 13,5 meters wide, 2,215 meters long, and rises 37,5 meters above the highest possible water level. SubasaBridge is a major part of the Greater Mekong Subregion (GMS)’s 2nd East-West Economic Corridor that linksCambodia, China, Laos, Myanmar, Thailand and Vietnam. The road will link to national road N 5 which is planned to be widened to four lanes by 2020. The 2nd corridor will also connectthe so-called «North-South Phnom Penh-Sihanoukville Growth Corridor» at Phnom Penh which leads to Sihanoukville Port, Cambodia’s principal international port. Airport. Convenient regional airport connections from Sihanoukville places the Morakot Island resort within easy reach from the largest Cambodian cities – Phnom Penh and Siem Reap via direct flights. The commencement of direct international flights to Sihanoukville, Cambodia’s main coastal town marks a significant step forward for the country ’s emerging resort property market. In 2014, the Sihanouk airport authorities have added direct flights to Seoul andGuangzhou, China. On 6th June 2015 Silk Air launched its’ first direct chartered flight from Singapore Changi to Sihanoukville. The area has progressively developed from no flight connectivity to 3 weekly flights to Siem Reap, followed by daily flights with additional services to Phnom Penh. Today Sihanoukville is welcoming direct international flights by Silk Air which will also pave way to future flight expansions by other airlines. Cambodia Bayon Air is considering direct flights

9 to Bangkok which could also lead Thai airlines to consider offering services on this route. When regular flights to Bangkok and Singapore to Sihanoukville begin, with other regional destinations to follow, the value of resort property in this area will increase significantly. The Cambodia’s three international airports received over 3.2 million passengers in the first six months of 2015, a 14 percent rise compared to the same period last year, according to the report of the Cambodia Airports on Saturday. Phnom Penh International Airport handled 1.5 million travelers during the January-June period this year, up 16 percent compared to the same period in a year earlier, Siem Reap International Airport accommodated 1.7 million passengers, up 11 percent, and Preah Sihanouk International Airport got 43,945 visitors, up 128 percent.Preah Sihanouk International Airport is capable to accommodate 700,000 travelers per year,according to officials. Rail.The railroad system connecting Phnom Penh to Sihanoukville has been restored andlaunched into operation for freight transport in late December, 2012. Passenger railservice fromSihanoukville toother parts of Cambodiaandbeyond is still not availablebut should be launched in operation as part of the Singapore-Kunming Rail Link(SKRL) by 2015-16. The Singapore Kunming Rail Link is a large scale infrastructuralproject aimed as connecting domestic rail networks in Southeast Asian countries suchas Laos, Thailand, Cambodia and Vietnam to form a continuous link from Singaporeto Kunming China. Port. The Sihanoukville Port is Cambodia’s main deep water port. Located on the Bay of Thailand (the Bay of Cambodia) in the beach resort community of Sihanoukville. The Sihanoukville Port has grown to be the largest port in Cambodia, and the only deep water port. Servicing container ships, Naval ships, and cruise ships from around the world. Now, at 125 hectares, the port is continually undergoing expansion and improvement (almost finished now). The Sihanoukville Autonomous Port (PAS) is becoming a main entry point for tourists to Sihanoukville, coming on cruise ships from Vietnam, Thailand, Indonesia and Singapore. Many foreign warships also stop here for some R&R. Despite the cruise liner traffic, the Sihanoukville port still does not offer regular international passenger ferry connections to other countries nearby.

10 NATURE AND SIZE OF PROPOSED DEVELOPMENT The Morakot Island development on Koh Puos Island is a unique luxury residential and resort project, occupying an area of approximately 116 hectares on the 120 hectares of the island. The total construction area on the island is approximately 58 hectares. The project is the most significant development to pioneer the tourism industry on the coast of Cambodia. The project encompasses the construction of one 6-star luxury hotel, two 5-star luxury hotels, one 4-star casino hotel, a VIP casino, beach club, high-end food and beverage facilities, a luxury spa and wellness center, a marina village, meeting and conference facilities, and apartments, bungalows and villas. The project will have 155 villas ranging from 2 to 4 bedrooms, 225 bungalows ranging from 2 to 4 bedrooms, and 198 apartments ranging from studio to penthouse. The price for whole ownership of hotel units ranges from $90,000 to $300,000; the price range for 1/12th fractional interests in the hotel ranges from $15,000 to $50,000. FIGURE №2

11 The price for whole ownership of the villas is from $1 million to $2.1 million with fractional villa share prices ranging from $167,000 to $363,000. The bungalow whole ownership prices range from $360,000 to $600,000 with fractional pricing ranging from $60,000 to $100,000. The whole ownership prices for apartments range from $130,000 to $600,000 with fractional prices ranging from $21,000 to $100,000. Project amenities include a spa and wellness center, a marina yacht club, a conference center, a sports center, a beach club, a children’s fun area, an internationally renowned casino, retail promenades, restaurants and cafes and bars and open air entertainment facilities and, of course, parking. MAINLAND DEVELOPMENT: HAWAII BEACHMORAKOT DEVELOPMENT ON KOH PUOS ISLAND The proposed mixed-used resort scheme will comprise a 475 key luxury casino hotel complex on the 6 hectares on the mainland and 3 hotels on with a total room count of 575 keys on Koh Puos Island. There are 14 different development zones for the project, with all anticipated to be completed in 2018. Phase 1 is currently under development and includes three zones; Morakot Bridge, Morakot Beach and Morakot Village. In addition, the master plan calls for 578 residential units distributed into 155 villas, 225 bungalows and 198 apartments integrated into marina hotel complex. The residential units will mostly be sold to individual buyers and managed by the international hotel operators on site. We present a summar y of the planned facilities-mix for the Morakot Island Resort in the table below: Nr. of units/keys Netarea, sq. m. Gross area in sq. m. CASINO HOTEL (MAINLAND) 475 Hotel&Conferencezone 52 883 Outdoorpools 1 200 Casinocomplex 6 000 Recreationalfacilities 5 000 5 000 Retail &Entertainment 1 800 1 980 Infrastructure 3 000 3 000 TOTAL 70 063 BEACH HOTEL (ISLAND) Hotel 150 24 353 Outdoorpools 1 000 Recreationalfacilities 600 660 Retail &Entertainment 1 680 1 848 Infrastructure 2 000 2 000 TOTAL 29 861 TABLE 1 HOTEL AND RESIDENTIAL FACILITIES-MIX FOR THE MORAKOT ISLAND RESORT

12 1 2 3 4 Nr. of units/keys Net area, sq. m. Gross area in q.m BOUTIQUE HOTEL (ISLAND) Hotel + villas 175 keys 28 549 Villas 60 units 4 800 Recreationalfacilities 3 000 3000 Outdoorpools 1 000 Retail &Entertainment 3 600 3 960 Infrastructure 3 000 3000 TOTAL 44 309 MARINA VILLAGE APARTMENT (ISLAND) Gross area in sq. m. RecreationalFacilities 250 18 857 Outdoorpools 3 000 Retail &Entertainment 1 000 Infrastructure 1 000 3 000 4 000 TOTAL 27 857 TOTAL HOTEL COMPLEX 172 090 RESIDENTIAL COMPONENT (for sale, vacation ownership) Villas 155 79 505 79 505 Bungalows 225 24 750 27 225 Apartments (Marina complex) 198 33 600 36 300 TOTAL 578 137 855 143 030 GROSS TOTAL 315 120 TABLE №1 (CONTINUED) VILLA

13 Facility Description SPA &Wellness Centre 20 treatment villas Indoor pool with hydro-massage Wet areas (hot & cold plunges, whirlpools, saunas, steam baths, loofah baths, showers) Vitamin bar and bio-restaurant Marina with yacht-club retail shops for boating supplies fishing and water sports gear groceries clothing boutiques Food and Beverage signature restaurants (2 on the island) all day dining 4 lobby bars (in the hotels) 8 club-houses to serve meals with small groceries for residents 4 poolside restaurants and bars 1 sunset restaurant (over-the-water) 3 cake shops + cafes 1 cigar and wine lounge Music room with afternoon tea Conference Centre 2 Ballrooms, 6 small function rooms, 10 boardrooms Sport Club Tennis & squash courts Small Golf Volleyball and football playgrounds Fitness center Yoga center Sport Club Tennis & squash courts Small Golf Volleyball and football playgrounds Fitness center Yoga center TABLE 2 LEISURE AND ANCILLARY FACILITIES-MIX FOR THE MORAKOT ISLAND RESORT The above facilities are supported by a generous apportionment of leisure infrastructure to ensure the luxury quality lifestyle, which the resort will offer its guests staying on the island. We specify the support amenities of the Morakot Island in the table below:

14 STRONG LOCATION Koh Puos Island is located only 950 meters from Sihanoukville mainland and is the nearest of a chain of coastal islands which stretch from the seaboards of Thailand on the North to Vietnam on the South (see Figure 3). FIGURE №3 Casino Gaming Floor, 2 restaurants, 3 bars, services Retail Shopping mall on the mainland and gallery on the island Boutiques Beach shops Amenities Description Beach Club Watersports activities and jets, boats rent Kids Club Small theme park Children pool with small aqua-park Eco-park Playrooms Children café Small farm Aquarium Beach Club Watersports activities and jets, boats rent Entertainment Library Open-airtheater Parking

15 It is less than 1 kilometer from the mainland (accessible island by means of the new bridge linking it to the mainland), 18 kilometers from Sihanoukville International Airport and 230 kilometers from Phnom Penh International Airport. The Morakot Island project has a number of accessible transport options. The city of Sihanoukville is currently accessible by road vehicle from Phnom Penh via three motorways: National roads 3, 4, and 48. The railway system connecting Phnom Penh to Sihanoukville has been restored and operation for freight transport began in late December 2012. Sihanoukville is also accessible through the Sihanoukville autonomous port, which is fast becoming a popular entry point for tourists who arrive on cruise ships from regional centers such as Vietnam, Thailand, Indonesia, and Singapore. Convenient regional airport connections from Sihanoukville will place Morakot Island resort within easy reach from the largest Cambodian cities, Phnom Penh and Siem Reap, via direct flights. Regular daily connection flights from Sihanoukville International Airport to major international destinations will include Hong Kong, Singapore, and other Asian and European cities. The Sihanoukville airport authorities have plans to complete the present construction work in 2018. INTERNATIONAL HOTEL OPERATORS These factors, combined with key aspects such as the management of the project by recognized international hotel brands. Currently, the developer has reached memoranda of understanding with Ritz Carlton, Marriot and Interstate Hotels & Resorts as resort operators and Camper & Nicholson’s International as marina developer and operator. Other comparable entities have shown an interest in the project and the developer is in the process of final decision making. These factors plus the extent of the planning permission, the gambling license and the developer investment made of $129,8 million U.S. in resort infrastructure, bridge construction, and masterplanning lead to the conclusion that this project will become a benchmark not only for the neighboring area but for South-East Asia. PLANNING Both the island and Hawaii Beach plots benefit from planning approval confirmed by the Cambodian Government. The site plan requires no significant change in the natural topography. All planning will be done according to the highest environmental standards and environmental protection. The resort will be developed as an eco-resort and the efficient plan conserves maximum open space on the island. An agreement for master plan finalization and landscaping design was signed with EDSA (www.edsaplan.com), one of the world’s most renowned masterplan designers and architects.

16 MANAGEMENT TEAM KPIG has begun establishing a team of internationally experienced professionals to assist it in delivering the project. PROJECT DIRECTOR Our Project Director Alan Watson has 35 years’ experience in all aspects of the design, project management and construction management of complex commercial, hospital and hotel developments in the USA, Europe, Middle East and Asia. Over the past 17 years involved in over 300 hotel projects varying in size from 200 – 1250 rooms in both city centre and resort locations in many of the major cities of the world. The vast majority of these hotels have been full service brand hotels including Marriott, Marriott JW, Marriott Courtyard, Marriott MEA, Renaissance, Ritz Carlton, Hilton, Sheraton, and Swissotel. Recent European projects include Project Director for Marriott International on the refurbishment of the 365 room Budapest Marriott (€38 million) and ground up Marriott CY Budapest; Belfast CY; Tbilisi Marriott Executive Apartments. FRACTIONAL CONSULTING TEAM We used to cooperate with strong consulting specialists in development of elite fractional property. This will be led by David M. Disick(The Fractional Consultant, Founding Partner), who is widely acknowledged as the founder of the development of fractional property in the United States and all over the world, recognized leader and guru in the issues of contemplation and development of ways of advancement of hospitality industry. Mr. Disick, a former partner in a national law firm, has worked in the industry more than 30 years in total. From the beginning of the 90th, David commenced to actively develop a new segment - development of fractional ski resorts. His first initiative has been the creation of fractional property in Sugarbush, Vermont. Then followed a number of successful projects, the very best of which has become Franz Klammer Lodge resort in Telluride, located in the world famous center of skiing in the Rocky Mountains, Colorado. The resort has won nine prestigious Ardy awards - including for the architectural solution, promotion and sales - from the American Resort Development Association (ARDA). Mr. Disick first coined the term Private Residence Club («PRC») for Franz Klammer Lodge. The term is now synonymous for luxury and exclusive services in the fractional resort industry.

17 OTHER PROFESSIONALS EDSA – a reputable master planner and architects.Practicing since 1960, the master planners and landscape architects of EDSA have been assisting private enterprises, developers, hospitality brands, and golf course architects around the globe in creating dynamic destinations by effectively integrating well-planned recreational, residential, civic, and retail design elements. EDSA’s extensive portfolio spans a wide range of scales, project types, and geographic locations. Its full scope of services includes site selection, site analysis, pre-development project feasibility/capacity and programming analysis, master planning, conceptual design, project evaluation/renovation, detailed site design, and construction administration services. With 135 professionals, six global offices and projects in over 90 countries, EDSA’s award-winning design, environmentally responsible ideas, and proven track record have intuitively influenced what is possible in land development and restoration. Ground Kents architects. With over 80 years combined directorial experience, Grounds Kent Architects (GKA) has established a world-wide reputation for excellence in the planning and design of large scale hotels, resorts, wineries, spas, golf club houses, cultural centres and mixeduse developments. GKA has received many awards and accolades over the years, including two time winners of the coveted Conde Naste Traveler award for “The Best Hotel in the World”. As a result GKA are widely recognised for their highly individual approach to design, and expertise in creating timeless landmark architecture. Camper Nicholson. Since 1782, Camper &Nicholsons has been synonymous with the world’s leading yachts, specialising in their sale, purchase, charter, marketing, management and construction. No other brokerage firm rivals its diversity and global yachting coverage.Camper &Nicholsons is constantly expanding its boundaries in every area of the superyacht industry, offering its clients the benefit of experience with the added advantage of today ’s state-of-theart equipment and constantly evolving expertise. Today Camper &Nicholsons International has 10 offices around the world, as well as a summer office in Newport, Rhode Island. Its staff numbers have grown significantly over the years and every Camper &Nicholsons employee has a genuine passion to deliver exceptional results. While its technology and communications remain unmatched, Camper &Nicholsons belief in the traditional values of customer service and friendly professionalism has remained unchanged. Building on more than 200 years of celebrated heritage, its greatest asset is the unparalleled experience and dedication to excellence in yachting. We consider that our team is highly qualified and is able to realize Morakot development project.

18 PROJECT INVESTMENT BUDGET MONEY INVESTED TO DATE The bottom line here is that the developer has invested approximately $129,8 million U.S. to achieve many of the initial elements for success. The details are as follow: # Expenditure Cost 1 Land lease, investment contract, contracts with the ministries, environmental impact assessments. Preliminary master plan. The topography of the island. Construction of temporary structures $32,509,980 2 Construction of the bridge, access roads, site preparation, mobilization, geological work, bridge design, documentation $27,429,000 3 Resettlement of people from the island, the island clean up, palms planting, fees for cut down trees, geology of the island $ 7,100,000 4 Purchase of vehicles/boats/watercrafts $ 1,200,000 5 Construction of infrastructure on the island $ 5,100,000 6 Construction of villas $ 7,000,000 7 Master planners work, documentation and drawings $ 2,700,000 8 Marketing research contract with the management company (Interstate), brands, architects, designers, construction companies, tenders, participation in exhibitions, PR company $ 3,900,000 9 Maintenance of offices and wages $ 9,500,000 10 Consulting expenses (Kensington, Knight Frank, Cushman, Crystal, Sands, Palms, Deutsche Bank, etc) $ 1,096,000 11 Legal expenses, auditors $ 800,000 12 Social contributions, assistance to the country, carrying out joint actions with the government, gifts, committee of friendship between Russia and Cambodia $ 6,500,000 13 Servicing of loans, bank charges $ 7,528,000 14 Travel and representative costs $ 1,800,000 15 Taxes and insurances $ 2,300,000 16 Other expenses (inc. share buy-out) $11,550,000 TOTAL $129.812.980 TABLE №3

19 TABLE №4 HOTELS LEVELS Name Level CASINO HOTEL **** BEACH FRONT HOTEL ***** BOUTIQUE HOTEL ****** HAWAII BEACH HOTEL ***** VILLAS ****** BUNGALOWS ****** APARTMENTS ***** According to Cushman & Wakefield estimation, the costs of the property construction are as follows: TABLE №5 TABLE №6. TOTAL CONSTRUCTION COSTS (INCLUDING TABLE 5) Property Cost CASINO HOTEL 62.687.800 BEACH FRONT HOTEL 45.960.400 BOUTIQUE HOTEL 38.924.750 HAWAII BEACH HOTEL 21.903.500 VILLAS 60.324.419 BUNGALOWS 25.183.125 APARTMENTS 21.961.500 Total main construction 276.945.494 Construction Expenses Design professionals/consultants $ 15 243 785 Beach $ 1 000 000 First-year construction expenses $ 18 038 686 Finalizing of previous period construction $ 8 792 600 Purchases of vehicles $ 300 000 Project work/additional design professionals $ 11 000 000 Commissioning of infrastructure $ 10 000 000 Main construction $ 276 945 494 COST OF THE MAIN CONSTRUCTION We determined the hotel star ratings in cooperation with hotel operating companies. Our consultants, The Fractional Consultant and Cushman & Wakefield, have also participated. Proposed ratings of the hotels are presented in Table №4.

20 PROJECT SCHEDULE Project schedule is presented in a Gantt chart below. TABLE №7

21 COUNTRY PROFILE: CAMBODIA GENERAL OVERVIEW The Kingdom of Cambodia is a Southeast Asian nation bordered by Vietnam to the east, Laos to the north, and Thailand to the northwest, and the Gulf of Thailand to the southwest. The kingdom is a constitutional monarchy with Norodom Sihamoni, a monarch chosen by the Royal Throne Council, as head of state. The head of government is Hun Sen, who is currently the longest serving non-royal leader in South East Asia and has ruled Cambodia for over 25 years. Cambodia has a seacoast on the Gulf of Thailand. International borders are shared with Thailand and the Lao People’s Democratic Republic on the West and the North, and the Social Republic of Viet Nam on the East and the Southeast. The country is bounded on the Southwest by the Gulf of Thailand. Cambodia’s key indicators are: • Land area o total: 181,035 sq. km o land: 176,515 sq. km o water: 4,520 sq. km • Coastline: 443 km • Population: 15.14 million. The country ’s climate is tropical: rainy, monsoon season (May to November); dry season (December to April); little seasonal temperature variation Landscape is mostly low, flat plains; mountains in southwest and north. Principal physical features include the Tonle Sap Lake and the Mekong and Bassac Rivers. Cambodia remains one of the most heavily forested countries in the region. Most Cambodians consider themselves to be Khmers, descendants of the Angkor Empire. Ethnic groups: Khmer 90%, Vietnamese 5%, Chinese 1%, other 4%. Religions: Buddhist (official) 96.9%, Muslim 1.9%, Christian 0.4%, other 0.8% Khmer is the official language and is spoken by 96.3% of the population, and other languages by 3.7%. Source: CIA World Factbook

22 POLITICAL OVERVIEW Following the Japanese occupation during World War II, Cambodia became independent within the French Union in 1949 and fully independent in 1953. After a five-year struggle, communist Khmer Rouge forces captured Phnom Penh in April 1975 and ordered the evacuation of all cities and towns. At least 1.5 million Cambodians died from execution, enforced hardships or starvation during the Khmer Rouge regime under Pol Pot. The December 1978 Vietnamese invasion drove the Khmer Rouge into the countryside, leading to a ten-year Vietnamese dominance and ending almost 13 years of civil war. The Paris Peace Accord in 1991 put an end to the civil war in Cambodia and paved the way for the establishment of democracy in Cambodia. United Nations (UN) sponsored elections in 1993 helped restore some semblance of normalcy and the final elements of the Khmer Rouge surrendered in early 1999. Factional fighting in 1997 ended the first coalition government, but a second round of national elections in 1998 led to the formation of another coalition government and renewed political stability. The July 2003 elections were relatively peaceful, but it took one year of negotiations between contending political parties before a coalition government was formed. Today, Cambodia is showing signs of political stability, as evidenced by its admittance to the UN in 1998 and its formal admission into ASEAN in April 1999. In July 2013, Cambodia held its fifth parliamentary elections since the UN-sponsored elections in 1993. A total of eight political parties contested the elections and more than 6.6 million Cambodians; or 68% of the voting population; took part in the voting. The ruling Cambodian People’s Party (CPP) won the elections by a very thin margin of 48.83% of the total ballots cast and 68 seats out of the 123-seat assembly. The strongest opposition party, Cambodia National Rescue Party (CPNR), led by Sam Rainsy, garnered 44.46% of the votes and won 55 seats. In the aftermath of the contested election results; the Cambodian People’s Party formed a oneparty government, following a parliamentary boycott by the opposition, Cambodia National Rescue Party: Consequently, the CPP and its leader; Hun Sen, continue to consolidate power despite a noted rise in popular support for the CPNR opposition party and more frequent antigovernment protests and garment labor unrests. In November 2013, the border conflict which irrupted in 2008 between Thailand and Cambodia involving the surrounding area of the ancient Preah Vihear temple ruins at the northwest Cambodia-Thailand border was finally resolved by mediation of the International Court of Justice; who upheld a 1962 decision and ruled in favor ofCambodia’s sovereignty over the Preah Vihear promontory. The court ruling also called for Thai military and police forces stationed there to withdraw troops. Governments of both countries agreed to peacefully implement the court ’s ruling to restore friendly diplomatic ties. Currently, Cambodia’s foreign policy focuses on establishing friendly borders with its neighbors as well as integrate itself into regional (ASEAN) and global (WTO) trading systems.

23 ECONOMIC OVERVIEW The economy of Cambodia at present follows an open market system (market economy) and has seen rapid economic progress in the last decade. Cambodia’s two largest industries are textiles and tourism, while agricultural activities remain the main source of income for many Cambodians living in rural areas. The service sector is heavily concentrated on trading activities and catering-related services. Cambodia has since had one of the best economic records in Asia, with economic growth averaging 6 percent for the last 10 years. Strong textile, agriculture, construction, garment and tourism sectors have led to foreign investments and international trade. From 2004 to 2007, the economy of Cambodia grew about 10% per year, driven largely by an expansion in the garment sector, construction, agriculture, and tourism. Growth dropped to below 7% in 2008 as a result of the global economic slowdown. In 2013 the Gross Domestic Product (GDP) in Cambodia grew by 6.0 percent from the previous year. Japan, China and South Korea are the three main investors in Cambodia. China is Cambodia’s biggest source of foreign direct investment. The Government of Cambodia offers a wide range of investment incentives to encourage business growth, job creation and to make investments in the country easy, attractive and worthwhile, such as 20% corporate tax, tax holidays, full import duty exemption, reinvestment of earning (special depreciation) etc. The Investment Law and sub-decree contains a number of important guarantees for the investors: • Equal treatment of all investors; • No requirement of local equity participation; • No price controls on products or services; • No restriction on forex convertibility; • Free remittance of foreign currencies abroad. Bilateral agreements on the promotion and protection of investments between the Kingdom of Cambodia and 24 countries exist including such countries as China, Germany, Indonesia, and both Koreas, Malaysia, Philippine, Singapore, Thailand, USA, Vietnam, Japan and other countries. Among the most meaningful investors in Cambodia the first place is taken by China with US $ 16,270 million, then follows Korea with US $ 4,327 million, EU US $ 3,685 million, Malaysia US $ 2,614 million, USA and Vietnam with more than US $ 1,280 million each. Tourism is an encouraged investment activity. Among the approved investments by sector from 1994 – 2012 tourism received up to 48%. Cambodia is taking advantage of a fast developing tourism sector with foreign arrivals exceeding 4.2 million per year in 2013. In 2013, Cambodia’s tourism sector is expected to have generated US$2.4 billion in receipts, which made up approximately 15% of the country ’s GDP. From 2004 to 2007, the economy of Cambodia grew by about 10% per year, driven largely by an expansion in the garment sector, construction, agriculture, and tourism. Growth dropped to below 7% in 2008 as a result of the global economic slowdown.

24 In 2013 The Gross Domestic Product (GDP) in Cambodia expanded by 6.0 percent from the previous year. Japan, China and South Korea are the three main investors in Cambodia. China is Cambodia’s biggest source of foreign direct investment. We show the main economic performance indicators from 2009 in the table below. TABLE №8 MAIN ECONOMIC INDICATORS--CAMBODIA (2008-2014) 2009 2010 2011 2012 2013 2014 Population, million. [1] 14.8 14.1 14.3 14.5 14.7 14.8 Nominal GDP, US $ [1] 7.3 11 13.3 14.5 15.9 18.3 GDP per capita, US $ [2] 490 776 932 1,001 1,084 1,231 Real GDP growth, % change y-o-y [1] -2 5.9 7.1 7.3 6.0 6.4 Consumer Price, % y-o-y, ave [3] 5.3 3.1 5.5 5.0 4.8 4.2 Lending rate, %, eop [3] 15.7 15.5 15.2 15.0 14.8 14.5 Exchange rate KHR/US $, eop [3] 4,145 4,053 4,039 4,300 4,150 4,000 Exports, US $bn [3] 3.6 5.1 6.2 7.1 8.2 9.2 Trade balance, US $ bn [3] -1.4 -1.7 -0.9 -1.8 -0.8 -1.0 Current account, % of GDP [4] -8.2 -8.2 -7.1 -5.4 -5.3 -5.3 Forex reserves (- gold), US $bn [3] 2.8 3.3 3.3 3.5 3.7 3.9 Import cover, months [4] 6.5 5.8 5 4.7 4.4 4.2 Foreign debt, % of GDP [5] 64.4 47.4 43.8 45.1 45.3 42.9 Sources: 1 National Institute of Statistics; 2 National Institute of Statistics/BMI Calculations; 3 IMF; 4 World Bank/UN/BMI; 5 National Bank of Cambodia/BMI. Cambodia is also taking advantage of a fast developing tourism sectorwith foreign arrivals exceeding 4.2 million per year in 2013. More importantly, oil deposits found beneath Cambodia’s territorial waters and the prospective exploration of mineral resources (bauxite, gold, iron and gems) will likely reshape Cambodia’s economy. Some of the obstacles faced by this emerging economy are the need for a better education system and the lack of a skilled workforce; particularly in the poverty-ridden countryside, which struggles with inadequate basic infrastructure. Nonetheless, Cambodia continues to attract investors because of its low wages, plentiful labor, proximity to Asian raw materials, and favorable tax treatment.

25 DYNAMIC EMERGING TOURISM MARKET Our tourism market research indicates that Cambodia has great potential to repeat the success of such developed tourist markets as Thailand, and in some regards to surpass it. Inbound tourism growth to the Cambodia has increased by 16% p.a. over the past 10 years. Key factors favoring intense tourism development growth in Cambodia include the operation of two international airports (Phnom Penh and Sihanoukville), tropical nature, sandy virgin beaches, UNESCO listed cultural heritage objects and a hospitable, service-oriented people. Sihanoukville represents an ideal tourism destination featuring pristine beaches, tropical islands and lush greenery. The current Sihanoukville hotel market is characterized by a large number of guesthouses of average quality, as the destination predominantly attracts backpackers. Existing and future supply of international/branded hotels in Sihanoukville is still very underdeveloped.The upscale or luxury hotel market is close to non-existent with only one fivestar hotel in the local market. The lack of quality hotel product in Sihanoukville indicates potential for an upward migration in new supply. Based on the performance of comparable destinations and seasonality, average annual room occupancy of 55% appears reasonable, considering the demand catchment area and seasonality. With the anticipated supply of new hotels and the launching into operation of medium- and long-haul flights at its recently upgraded international airport, Sihanoukville will attract more interest from regional and international hotel brands. The hotel market in Sihanoukville is an emerging market in terms of regional and domestic demand growth. There is a limited pipeline for the next 5 years of serious upscale or luxuryhotels and resorts competition anticipated in the Resort ’s catchment area (Sihanoukville).

26 CAMBODIA TOURIST INDUSTRY ANALYSIS INTRODUCTION Cambodia has a longstanding tourist tradition. In the 1960s, Cambodia was a prominent tourist destination in the Southeast Asian region. However, due to protracted periods of civil war, insurgencies from 1975 to 1990, Cambodia’s tourism industry was close to non-existent. Since the late 1990s, however, tourism in Cambodia has experienced a strong revival and is fast becoming the country ’s second largest industry, and greatest source of hard currency, just behind textile manufacturing. The country offers extensive tourism resources through its rich history and culture. Renowned for its cultural heritage sites such as the UNESCO-listed Angkor Wat temples, Cambodia also offers a variety of untouched natural environments such as beaches, islands and forests. Cambodia’s Ministry of Tourism has focused its tourism development on four aspects, namely culture, coastal, city and ecotourism. In terms of culture, there are approximately 40 identified sites of the Angkor temple complex in Siem Reap and its surroundings. These temples embody rich cultural and historical significance and two are currently listed as UNESCO World Heritage Sites. The new tourism strategy of the Ministry of Tourism aims to spread tourism to other provinces beyond Siem Reap and Phnom Penh, and to both cultural heritage and ecotourism. The intense development of Cambodia as a tourism destination has been supported by the development of important transportation infrastructure; in particular Cambodia’s two international airports in Phnom Penh and Siem Reap respectively. TABLE №9 INTERNATIONAL TOURIST ARRIVALS TO CAMBODIA IN JANUARY - DECEMBER 2014 Inbound tourism Share (%) Change (%) 2013 2014 2013 2014 2014/13 Air 2,017,658 2,273,493 47.9 50.5 12.7 Phnom Penh Int'l Airport (PNH) 836,377 917,800 19.9 20.4 9.7 Siem Reap Int'l Airport (REP) 1,181,281 1,355,693 28.1 30.1 14.8 Land and Waterways 2,192,507 2,229,282 52.1 49.5 1.7 Land 2,117,454 2,132,332 50.3 47.4 0.7 Waterway 75,053 96,950 1.8 2.2 29.2 Total 4,210,165 4,502,775 100.0 100.0 7.0 The statistics underpin consistent growth of tourism for all months of the year. This increase can be explained in part by the government ’s determination to allocate the country ’s unspoiled tourism resources and human capital to achieve substantial improvements in tourism and transport infrastructure to include more roads, better functioning international airports; quality hotels and facilitate the creation of restaurant, bars and entertainment facilities to further promote the Cambodian tourism experience.

27 The popularity of Cambodia as a tourism destination is sustained by competitive pricing of package tours; tropical setting and low cost of labor. Perceived as a more affordable choice to neighboring Thailand and Vietnam, Cambodia has sought to diversify its tourism product by developing other leisure resorts besides excursion to historic and religious sites such as the Angkor temples near Siem Reap, the riverside town of Battambang; Bokor Hill Station or the capital city Phnom Penh. During recent years, the Cambodian Ministry of Tourism has been actively promoting the coastal town of Sihanoukville as a new leisure destination, reputed for its beautiful unspoiled beaches and tropical islands. Asia is the largest source of tourism demand for Cambodia. Vietnam and South Korea are the two leading countries in visitor arrivals, accounting for 21.2% and 11.5%, respectively. 17.5% of total arrivals are from the North Asia sub-region including China, Taiwan, Hong Kong and Japan. The increasing number of gaming establishments in Cambodia is likely to draw more visitors from regional countries, particularly from Vietnam, given its proximity to Cambodia and the gaming ban on its residents. Europe is the second largest source market for Cambodia, accounting for 17.3% of total arrivals. An increasing number of international airlines are looking into commencing direct flights to Phnom Penh. An increase in direct international flights to Cambodia is likely to support long haul market growth in the future. TOURISM ARRIVALS The table below exposes the evolution in tourism arrivals, average length of stay, hotel occupancy and tourism receipts as compiled by the Cambodian Ministry of Tourism of the past two decades (1993-2013). TABLE №10. INTERNATIONAL TOURIST ARRIVALS, AVERAGE LENGTH OF STAY, HOTELS OCCUPANCY & TOURISM RECEIPTS 1995 - 2013 Source: Cambodia Ministry of Tourism, 2015 Years Int'l Tourist Arrivals Average Length Hotels Occupancy Tourism Receipts Number Change (%) of Stay (Days) (%) (Million US $) 1995 219,680 24.4 8.00 37.00 100 1996 260,489 18.6 7.50 40.00 118 1997 218,843 -16.0 6.40 30.00 103 1998 286,524 30.9 5.20 40.00 166 1999 367,743 28.3 5.50 44.00 190 2000 466,365 26.8 5.50 45.00 228 2001 604,919 29.7 5.50 48.00 304 2002 786,524 30.0 5.80 50.00 379 2003 701,014 -10.9 5.50 50.00 347 2004 1,055,202 50.5 6.30 52.00 578 2005 1,421,615 34.7 6.30 52.00 832 2006 1,700,041 19.6 6.50 54.79 1,049 2007 2,015,128 18.5 6.50 54.79 1,400 2008 2,125,465 5.5 6.65 62.68 1,595 2009 2,161,577 1.7 6.45 63.57 1,561 2010 2,508,289 16.0 6.45 65.74 1,786 2011 2,881,862 14.9 6.50 66.15 1,912 2012 3,584,307 24.4 6.30 68.49 2,210 2013 4,210,165 17.5 6.75 69.53 2,547

28 AIRPORT TRAFFIC Cambodia has emerged as one of the fastest growing markets in Southeast Asia, recording on average 18% passenger growth for the second consecutive year in 2013. Passenger traffic increased by 15.2% in Phnom Penh and 19.8% in Siem Reap while domestic traffic between Siem Reap and Sihanoukville increased by 51% in 2013 compared to 2012. The Cambodian airport authorities recorded a 17.7% increase for the three International Airports compared year-on-year. Phnom Penh International Airport handled 2.39 million passengers while Siem Reap International Airport, which serves the Angkor Wat temple, handled 2.66 million passengers. Cambodia Airports, the operator of the three International Airports, Phnom Penh, Siem Reap and Sihanoukville, handled 5.07 million passengers in 2013. FIGURE №5. TOURISTS ARRIVALS TREND The evolution in tourism arrivals is also evidenced by unabated growth year-on-year, which also establishes a seasonal pattern, with fluctuation peaks in March, July-August and December: The geography and climate of Cambodia have made it a popular destination in winter months: The intense development of Cambodia as a tourism destination has been perpetuated by the development of important transportation infrastructure; in particular Cambodia’s two international airports in Phnom Penh and Siem Reap respectively. FIGURE №4. THE SIGNIFICANT INDICATORS OF TOURIST MARKET

29 SEASONALITY In the table below, we present the arrivals trends from 2009 to 2015 on a month-by month basis: FIGURE №6 TOURISM ARRIVALS IN CAMBODIA (2009-2014) Months 2009 2010 2011 2012 2013 2014 (%) 2014/13 Q1 622,288 683,692 778,467 995,210 1,172,072 1,267,922 8.2 January 218,691 232,590 274,471 350,257 404,106 442,045 9.4 February 200,789 222,354 255,499 321,870 385,760 425,801 10.4 March 202, 808 228,748 248,497 323,083 382,206 400,076 4.7 Q2 464,230 537,464 606,562 761,442 920,527 933,446 1.4 April 177,955 200,965 223,032 277,304 327,000 332,690 1.7 May 145,564 170,164 190,258 233,220 292,115 300,302 2.8 June 140,711 166,335 193,272 250,918 301,412 300,454 -0.3 Q3 487,422 582,024 699,760 820,888 964,612 998,690 3.5 July 163,817 202,349 239,527 284,282 338,761 340,091 0.4 August 171,668 206,563 250,429 293,859 342,064 347,211 1.5 September 151,937 173,112 209,804 242,747 283,787 311,388 9.7 Q4 587,637 705,109 797,073 1,006,767 1,152,954 1,302,717 13.0 October 157,105 205,515 233,190 290,959 334,410 390,637 16.8 November 195,570 249,892 265,539 333,482 386,737 411,501 6.4 December 234,962 249,702 298,344 382,326 431,807 500,579 15.9 Source: Cambodia Ministry of Tourism, 2015 FIGURE №7 TOURISM ARRIVALS BY MONTHS Source: Cambodia Ministry of Tourism, 2015

30 The statistics underpin consistent growth of tourism arrivals even for each month of the year: This noted increase can be explained in part by the government ’s determination to allocate the country ’s unspoiled tourism resources and human capital to achieve substantial improvements tourism and transport infrastructure to include more roads, better functioning international airports; quality hotels and facilitate the creation of restaurant, bars and entertainment facilities to further promote the Cambodian tourism experience. Further; the popularity of Cambodia as a tourism destination is sustained by competitive pricing of package tours; tropical setting and low cost of labor. Perceived as a more affordable choice to neighboring Thailand and Vietnam; Cambodia has sought to diversify its tourism product by developing other leisure resorts besides excursion to historic and religious sites such as the Angkor temples near Siem Reap; the riverside town of Battambang; Bokor Hill Station or the capital city Phnom Penh. During the recent years, the Cambodian Ministry of Tourism has been actively promoting the coastal town of Sihanoukville as a new leisure destination, reputed for its beautiful unspoiled beaches and tropical islands. TOURISM ARRIVALS BY GEOGRAPHIC ORIGIN The main sources of tourism traffic are presented in the figure №8 and table №11. FIGURE №8. TOURISM TRAFFIC BY COUNTRIES TABLE №11 Year Vietnam China Lao PDR S. Korea Thailand Japan USA Malaysia France Australia 2014 905,801 560,335 460,191 424,424 279,457 215,788 191,366 144,437 141,052 134,167 2013 854,104 463,123 414,531 435,009 221,259 206,932 134,964 130,704 131,436 132,028

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