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Last Shareholders meeting:
26 May 2020

Next Shareholder meeting:
Before 30 June 2021 (date still to be determined)

Asset managment services provides – Valartis International Limited, B.V.I., P.O. Box 3340 Dawson Building Road Town,Tortola, British Virgin Islands

To invest in private and public companies across different industry sectors as well as the real estate sector and to do so predominately in Russia and other Commonwealth of Independent States countries and in the Baltic States and to manage the asset portfolio to achieve long term capital appreciation on invested capital.

The investment philosophy is growth-oriented and the focus is primarily on longer term strategies and capital appreciation. However, from time to time there may be certain investments which have a shorter investment horizon, reflecting specific opportunities or taking account of prevailing market conditions. At times the asset portfolio may comprise entirely of cash or cash equivalents.

Investments will be done primarily through equity and/or equity related and/or debt instruments or derivatives instruments.

Where capital resources have not been not fully invested, same may be invested in a range of investment products, money market instruments, investment instruments issued by governments, financial institutions or companies, denominated in the currency of the country where investments are made or in any freely convertible currency. The company may take temporary defensive positions if the investment manager determines that opportunities for capital appreciation are limited or that significant diminutions in value may occur.

From time to time all or part of risks associated with investments may be hedged through the defensive use of derivative transactions, including, but not limited to, futures, options, swaps or any combination thereof.

From time to time leverage may be used in a manner commensurate with reasonable risk management to achieve investment objectives.

While investment criteria may vary depending upon the type of transaction, factors taken into consideration when analysing potential investments include:

• • • Attractive valuations and purchase prices;

• • • Strength, depth and commitment of the management team;

• • • Existence of a coherent and realistic long term business plan;

• • • Relevant asset values;

• • • Corporate governance issues;

• • • Identifiable exit strategies;

• • • Risk management; and

• • • Active post-acquisition investment approach

Investment opportunities will be identified and analysed by the investment manager or its delegates or agents within the framework of the investment guidelines. The investment manager or its delegates or agents will manage the screening process and, inter alia, conduct interviews with management and owners with the objective of aligning differing interests. The investment manager’s responsibilities include valuations, market analyses, competition analyses, debt capacity calculations, bid tactics, tax optimizing holding structures, financing structures, raising of debt finance, management incentives, personnel reinforcements required, due diligence processes and the intended exit strategy.

Day-to-day investment decisions will be made by the investment committee in accordance with the investment guidelines, as determined by the board of directors.

The investment guidelines may be amended by the board of directors at any time, in whole or in part. Amendments will become effective upon their approval by the board of directors (after expiry of any notice period for regulatory publications which may be required). The company may from time to time impose further investment restrictions, compatible with or in the interest of investors, or, in certain circumstances, in order to comply with relevant country laws and regulations.

Updated with effect 26. November 2016.

During October 2014 ENR acquired the Petrovsky Fort office centre in St Petersburg, Russia (“Petrovsky Fort”).

Petrovsky Fort is a high-quality office center with a total area of 47,600 s.qm, located in central St. Petersburg near the embankment of the Neva River. There are 9 office and 2 retail levels with a large central atrium. Of the total net rentable area, approximately 15’000 square meters are designated for office use and about 6’000 square meters as retail space. There is also an underground parking facility with 119 parking spaces and above-ground parking for 36 cars.

The business center was completed in 2003 and modernised in 2010 (air & ventilation systems, lobby reconstruction). As part of the  ongoing capex program to continuously improve the business center and where offices and retail areas are renovated each year. Recently all windows were repaired or replaced and low energy lights were introduced.

The business Center has a proven and relevant business concept offering smaller offices and flexible leasing alternatives to small and medium size businesses. It also has office and retail space for larger tenants. On the 2 retail floors there are a number of businesses offering services and food and beverage offerings to tenants and visitors of the building.

There is good transport access from city centre and surrounding districts (bus; tram and metro) and it is situated close to the Finlyandsky railway station. It has convenient pedestrian access and the nearest metro 900 metres from the building.

A Saint-Petersburg based operational management team is experienced and the core team has been the same for past 14 years and has managed the business centre successfully through a few challenging economic cycles. The property manager,Valartis International in Russia, has more than 20 years of experience in managing Russian real estate investments & developments (> US$ 1 billion).

In July 2017 ENR acquired a 50% interest in the Turgenevskaya parking garage at Turgenevskaya square on the Boulevard Ring in the central business district in Moscow, Russia.

The parking garage was opened in January 2012 and has a gross built area of almost 10’000 square meters, with 297 parking lots (18 above ground and the rest in 6 levels underground).

Parking lots are leased to corporate clients and to individuals and on an hourly basis for other users. There are several business centers and retail properties in the surrounding area (including the Lukoil head office), with 3 subway stations within close walking distance.

Over the past few years market trends in Moscow improved meaningfully for parking garages as Moscow city authorities are now charging for parking and introduced strict legislation and enforcement measures to curb illegal parking, meaningfully reducing illegal parking, The city also introduced a street closure program to create pedestrian traffic zones where many surface parking place were removed, leading to increase demand for paid parking facilities.

ENR, via a wholly owned subsidiary, acquired a 50% interest in a 27.4 hectare greenhouse and engineering facility for flower growing in the Kaluga Oblast in Russia (“Flower Growing Facility”). ENR teamed-up with a Russia based investment group, who owns the remaining 50% interest (collectively the “Investors”).

The purchase price and initial investment for capital and operational expenses is RUB 742 million (approximately CHF 11.5 million). ENR’s 50% contribution is RUB 371 million (approximately CHF 5.75 million). Together with further investments (see below), it is anticipated that the Investors could ultimately invest a total of about CHF 20 million (or less if low interest rate Russian bank funding can be obtained under Russian agricultural incentive programs). Investor contributions will be made via a combination of equity and shareholder loans.

The Flower Growing Facility is well engineered and equipped with 5 stand-alone greenhouses (the largest greenhouse is 100’000 sq.m). Each greenhouse has gas driven combined cycle generators and heating systems, water treatment and distribution systems as well as flower growing and harvesting machinery and equipment (mainly Dutch manufactured). The Flower Growing Facility was not operational for several years whilst under the control of the Russian Deposit Insurance Agency. Further investments are required to service or replace parts of engineering equipment, to buy flower plants and bulbs and to part fund operations until the business is cash-flow positive. It should take two to three years to bring back the Flower Growing Facility to full capacity and a strong management team has been appointed to drive this process, together with the Investors.

It is an objective to become the leading grower and seller of quality roses and seasonal flowers in Russia. Over time roses will represent some 55% of total grown flowers. Gerberas and a range of seasonal flowers, including tulips, will make-up the rest of the flower mix. In Russia demand for flowers remain strong and 80% of cut flowers are imported. Russian grown flowers will be a substitute for imported flowers and the Flower Growing Facility (located some 135 km from Moscow, Russia’s largest flower customer market) will have a shorter and less expensive route to market compared to imported flowers and also compete on quality and have longer shelf lives.

The focus will be on strong cash-flows generation within a reasonable time period, to introduce operational efficiencies, to improve profit margins and returns for the Investors. Strong corporate governance and financial reporting control structures and processes will be put into place.

The main brand name under which Kaluga Flower Holding LLC markets and sells its flowers is called ‘Florentika’

08/26/2020 ENR Russia Invest SA announces 2020 half-year results
05/26/2020 ENR Russia Invest SA announces results of 26 May 2020 annual general meeting
04/29/2020 ENR Russia Invest SA announces first quarter 2020 net asset value per share
04/07/2020 ENR Russia Invest SA announces 2019 audited results