Business

Plan
Apartment Resort “Zlatibor”

STA-Investicije DOO
Novembar, 2017

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Summary

Introduction

XYZ company, Zlatibor establish a company established with the goals of running investment projects for the construction of
apartment and apartment complexes in Zlatibor, as well as providing maintenance services and managing non-residents. The goals
are to provide apartment owners and those who want to become a top service. Accordingly, XYZ will invest in ways that offer
competitive advantages to their customers.

The company has a strategy based on the process of continuous improvement of the process, aims at results with the goal of
ensuring further growth and development.

XYZ,Zlatibor is a limited partnership with the construction of residential and non-residential buildings. The company's management
has a long-standing experience. Mr. Alexander K., who runs the management team, has over 10 years of experience in the
construction industry. With her extensive experience in investing and investment management, she has developed and provides a
business framework for the execution and management of projects.

Location

Zlatibor is located only 230 kilometers from Belgrade and 300 kilometers from the Montenegrin coast at 1000 meters above sea
level. Zlatibor is one of the most popular destinations for nature lovers and active holidays, which has the necessary infrastructure
for recovery and recovery. Zlatibor is characterized by highly developed sports, health, congress tourism. A light walk from the
village arrives to the top of Čigota at 1422 meters high, while the ski center Tornik with its three ski slopes is only 7 kilometers from
the settlement. The Zlatibor climate is known for its beneficial effect on health and it is exceptional preparation of athletes in the
area where the continental and Mediterranean climate is encountered.

Project

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Apartment Resort “Zlatibor”will consist of 11 free-standing facilities, of which 10 are intended for apartment-type and apart-hotel
facilities. The apartment hotel is a functionally independent unit, connected with an underground pedestrian corridor with an
underground garage below the apartment buildings. In addition to the apartment hotel, it is planned to build a special parking lot
that includes open parking on several levels on the ground and two buried levels of covered parking which are connected by
underground pedestrian connection to the ground floor of the hotel.

Financial Indicators

Taking into account the free cash flow realized during the project implementation period, the internal rate of return on investment
is 11.61%. It is also important to note that in the analysis of the return on investment partly included costs related to the next phase
of construction of the hotel work. In addition, the price that is accepted during the calculation is a conservative approach that takes
all the apartments to be sold at a lower average price of a square meter square. Additionally, the approach to the sales plan of three
years is also a conservative approach, given that the target time of sales is to sell amartements up to 18 months.

About the company

XYZ Zlatibor was a limited liability company registered in March 2017. The company was founded with the goal of managing the
investment and project of building residential buildings, and providing the necessary knowledge, experience and expertise of the
necessary rationalization of housing construction projects. The company was founded by the Kneževid family, which has a long-
standing and construction of
residential and commercial
complexes and facilities in Bosnia
and Herzegovina.

Company XYZ Zlatibor plans to

start its activity in the Republic of
Serbia by implementing the project
Apartment Resort “Zlatibor”which
is only the first in a series of
planned projects. In addition to the
development, execution and
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management of its own projects, the company offers its knowledge, experience and services for the implementation of projects for
the construction of residential and commercial complexes. The company aims to be an integral part of the plan for development,
implementation and management of investments that are planned in the future period in the area of the Zlatibor region.

About the project Apartman Resort „Zlatibor“

Apartment settlement Zlatibor is located near the center of Zlatibor, and the village can be accessed from the Ibarska highway. The
location offers peace and nature and at the same time the distance from the center is only a few minutes away. Zlatibor is located
only 230 kilometersfrom Belgrade and 300 kilometers from the Montenegrin coast at 1000 meters above the sea level.

Zlatibor is one of the most popular destinations for nature lovers and active holidays, which has the necessary infrastructure for
recovery and recovery. Zlatibor is characterized by highly developed sports, health, congress tourism. A light walk from the village
arrives to the top of Čigota at 1422 meters high, while the ski center Tornik with its three ski slopes is only 7 kilometers from the
settlement. The Zlatibor climate is known for its beneficial effect on health and it is exceptional preparation of athletes in the area
where the continental and Mediterranean climate is encountered.
Apartment settlement Zlatibor with its composition plans to depict the
harmony of nature and human need for enjoying it. Maintenance of green
surfaces, maintenance services, hygiene of settlements and apartments, as
well as renting will be carried out by a company that, in addition to
managing the apartment hotel, plans to assume the obligation and
responsibility to ensure the functioning of the settlement itself.

Apartment Resort “Zlatibor”will consist of 11 free-standing facilities, of

which 10 are intended for apartment-type and apart-hotel facilities. The
apartment hotel is a functionally independent unit, connected with an
underground pedestrian corridor with an underground garage below the apartment buildings. Apart from the apartment hotel, it is
planned to build a special parking lot that includes open parking on several levels on the ground and two buried levels of covered
parking which are connected by underground pedestrian connection with the basement.

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The Apartment Resort “Zlatibor”is designed in a simple modern style that tends to simple aesthetic forms characteristic of mountain
areas. The entire settlement is designed to observe the maximum utilization of natural light and exposure to the sun. Accordingly,
the settlement is imaginatively to reflect an idyllic settlement that is located next to the nature park "Zlatibor".

The apartment hotel H is an independent part of the main entrance position, partly separated from the rest of the apartment
complex, while the commercial facilities of the hotel remain connected with the rest of the complex in the basement floor, which is
accessed from the level of a pedestrian plateau. The hotel above the level of the basement, on the ground level, has a large open
terrace with a view of the apartment complex. The aparthotel's high-rise building dominates the apartment complex and from it
further objects descend to the access road, enhancing the natural morphology of the terrain.

Below the apartment complex there is an underground garage planned to provide comfort and protection to the apartment user's
vehicles and at the same time provide an environmentally and visually appealing environment without vehicles. In the part of the
location where the transmission line passes, there is an open parking lot that is separated from the rest of the complex by an
internal road.

Part of the parking lot is buried to provide vehicle protection for hotel users and a warm connection is connected to the ground floor
of the hotel. Open parking and covered parking areas are cascadingly arranged on the slope alongside the hotel, following the
natural fall of the terrain and do not deviate aloft from the line of the existing terrain in order to respect the protective belt of the
main transmission line.

Technical description of the settlement and urban indicators

The total area of the cadastral parcel is 15 022.00 m². The total projected gross area of all underground and above ground facilities is
19 246.31 m², while the total gross surface area of all above ground parts of the building is 12 118.05 m². The permitted building
index according to the given location conditions for the construction of objects for the projected purpose is 1.20. The realized index
of construction according to the projected solution is 12 118.05 / 15 022.00 = 0.806686859 which is less than the allowed.

The total net space is 12 447.19 m². The achieved percentage of occupancy of the horizontal projection of above-ground parts of the
facility to locations is 22.69%. The minimum percentage of green areas according to location information is 20%. The total surface
area of the landscaped green areas is 3408,49 m2, therefore the percentage of green areas is 22,69%, which is in accordance with
the given conditions. The permitted level of facilities according to the location information is P + 3 floors for apartment buildings, P +

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5 for hotel facilities. The realized level of apartment buildings is from Su + P + Pk to Su + P + 2 + Pk, while the floor is the hotel facility
Po + Su + P + 4 + Pk.

The permissible distance between the objects on the plot must be greater than half the height of the larger object. The achieved
distance between the objects is 13.5 m at the height of the sides of the objects, 6.9 m on the lower sides of the objects, which meets
the required distance to the height of the objects.

The realized number of parking places is 231, of which 13 seats are reserved for persons with special needs (5% of the total number).
According to the requested contents, the distribution of parking spaces is as follows:

The total net area of the apartment units is 6 069.16 m², the total number of apartments is 146 units. The required number of
parking spaces for apartment buildings is146 p.m.

The total accommodation capacity of the hotel is 58 accommodation units, i.e. 116 beds. The required number of parking spaces for
hotel facilities is one p.m. on 4 beds. The required number of parking spaces for the accommodation capacity of the hotel is 29 p.m.

The number of seating places in the restaurant, the restaurant terrace and the hotel's fireplace hall are 168 seats. The required
number of parking spaces for the restaurant's service facilities is 1 p.m at 12 seats. The required number of parking spaces for these
facilities is 14 p.m.

In the basement of the hotel, it is planned to accommodate various facilities such as a spa, shops with service and trade facilities, as
well as an entertainment complex (billiard club). The total net useful area of the hotel's basement with these facilities is 792.85 m².
The required number of parking spaces for these activities is 1 p.m. on 50 m² of useful surface, which requires a total of 16 p.m. for
all the aforesaid contents.

By gathering the minimum required parking spaces according to the activities and realized capacities, we get the minimum required
number of parking spaces at the location 146 p.m + 29 p.m. + 14 p.m. + 16p.m. = 205 parking lots. Realized number of 231 p.m. all
the parking requirements were met on site and a reserve of 26 p.m. was achieved.

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Strategy and implementation of the project

Apartment Resort “Zlatibor”is currently finished with the phase of preparing the necessary
documents. During the pre-term period, it provided all the necessary requirements including
urban planning and construction permit, which were approved on the basis of completed
project documentation. The ompany has provided ownership of the construction plot, and has
already begun the prepared land works. Currently, the project is in the phase of collecting the
necessary funds for financing the construction of the project.

Only the realization of the project is planned in two stages of the uprising. In the first phase, the
construction of an apartment building with an underground parking is planned. Together with
the beginning of the works, it is planned to start and marketing campaigns for advertising and
sales of apartments. After the finalization of the first phase and the beginning of the sale of the
apartments. The expected time spent for the finalization of the first phase of the project is 24
months from the beginning of construction.

After collecting funds, the start of the construction of the second phase of the project, which
refers to the construction of the Apartment Hotel, is envisaged. The estimated time of
construction and finalization of this phase is two years from the beginning of construction.
Hotel management after the completion of construction was taken over by the investor XYZ
himself. In addition to the hotel industry itself, the hotel and the company would take over the
maintenance of green surfaces, maintenance services, hygiene of settlements and apartments,
with which the company takes on itself the responsibility and responsibility to ensure the
functioning of the settlement itself.

Selling price of the apartment

The price of the apartment is defined on the basis of prices of appliances with similar
characteristics and micro location. The average price of apartments located in the same locality
of similar characteristics, the analysis showed that the price ranges from EUR 1,500 to EUR
1,800. The same range is planned to sell apartment after construction. Identified prices
represent the offered price, not the realized price per square meter. Consequently, when
defining the prices, they are 20% reduction compared to the offered prices.

Zlatibor is one of the most popular destinations for nature lovers and active holidays, which has
the necessary infrastructure for recovery and recovery. Zlatibor is characterized by highly
developed sports, health, congress tourism. Official statistics of the Republic of Serbia show
that Zlatibor is expected to visit a record number of tourists that will amount to more than one
million, with a historical growth trend of up to 20%.

The expected realization of sales in the first year is 60% of apartments, while in the next year is
planned 30%, while the last 10% is planned to be realized in the third year after the
construction. The values in the table represent the planned expectations and sales plan.

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The number of squares is determined on the basis of the sizeable average square, taking into
account the fact that the apartments are of different sizes and squares. Also, it should be noted
that the foreseen dynamics is a cautious approach in terms of selling apartments, especially

Year of Number of considering the experiences with previous

Total sqm projects that were realized in the period of
selling apps.
up to 18 months.
First 89 3.626,08
Second 42 1.713,26
Third 14 570,70

Marketing Strategy

Company plans to use direct sales channels and personal sales. We consider these channels
responsive, recognizing that they provide direct access to the market and quickly establish sales
channels. The marketing plan is based on the following distribution channels: television, radio,
website and digital marketing.

It is also planned to advertise via magazines, newspapers and radio commercials. A special
focus is on digcast marketing through electronic media. Accordingly, the annual budget for
marketing investment purposes in the amount of EUR 20,000 is planned.

Projection

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The financial projection takes into account the above-mentioned facts and refers to the first
phase of the building, or to the part of the apartment settlement. Expected construction costs
are bazaar based on project documentation and determined prices of construction materials
and associated costs on the market. The total investment needed in the first phase, which
refers to the construction of an apartment complex, which includes part of the cost of pre-
contracting works, licenses and project documentation relating to the costs of the second
phase or the construction of the Apartment Hotel. The expected value of the first phase
amounts to approximately EUR 6,200,000, while the amount of the investment in the second
phase, which is entirely on the costs of construction, is approximately EUR 3,000,000.

Conclusion

The strength of the company is reflected in the upcoming experience of the company's
mandate in the realization of projects related to the construction of residential and business
complexes. In addition, it should be noted that the Apartment Resort “Zlatibor”project has all
the necessary documentation for the start of construction since October 2017. Moreover, the
XYZ company has already begun on preparatory earthworks. It is necessary to mention that
the main weaknesses of the project are currently reflected in the fact that there are no funds
provided for financing a competing project, which could result in the sale of apartments in
construction and compensations with construction companies if funds are not provided by
other investors, which would significantly impact at the rate of repayment of investments.

Beside already mentioned, it is necessary to mention that Apartmansko Naselje Zlatibor is

situated in an attractive location on Zlatibor, a famous tourist destination with a positive
growth trend of up to 20% of the number of tourists. Moreover, the complex represents
unique apartments that are found along the protected zone of the Zlatibor Nature Park,
which guarantees that the Apartmansko Naselje Zlatibor is an exclusive location in the area
where the construction of new apartments is limited. However, the rapid expansion of the
capacities in the area of Zlatibor, although limited by the newly defined nature park zone and
unlikely, could affect the slower realization of apartment sales.

Upon completion of the entire project, the hotel would remain the property of the company,
investors after acheaving break-even point and if the company decides to sell it, the current
market value of such an object in the mentioned location would amount to about EUR
12,000,000.00

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