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Mikr o Kapital ASSET MANAGEMENT

Mikr o Kapital ASSET MANAGEMENT. Mikr o Fund PRINCIPAL INDICATORS ON MARCH 31st 2011. July 4th 2011. 1. Disclaimer.

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Mikr o Kapital ASSET MANAGEMENT

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  1. Mikro KapitalASSET MANAGEMENT MikroFund PRINCIPAL INDICATORS ON MARCH 31st 2011 July 4th 2011 1

  2. Disclaimer The only reason of the presentation is to purpose a financial investment methodology instead of any financial product; neither any solicitation to buy or to sell some specific product or service. Although the information and the opinions expressed in the presentation are obtained by the qualified sources, we assume no responsibility expressed or implied regards the accuracy and completeness of this information. Mikro Kapital does not provide tax or legal consulting. Therefore, this presentation does not represent an advising.Mikro Kapital recommends to all interested in any product or service represented in the presentation, to get a proper legal, tax or other specialist consulting in standalone mode. The General information contained in the presentation are not specific to your personal investment and your financial situation or financial needs. Some products and services are subject to the legal restrictions and cannot be offered worldwide unconditionally. All the information, opinions and values indicated are subject to change without notice. This presentation, approved and issued by Mikro Kapital, may not be copied or duplicated, in whole or in part,without prior permission of Mikro Kapital. 2

  3. Content PART 1 Group structure 5 PART 2 Investors information 14 PART 3 Recent Bond emissions 23 PART 4 Investment overview 27 PART 5 Risk Management: Business drivers34 PART 6 Financial balance analysis40 3

  4. Introduction • This document intends to provide a Mikro Kapital detail analysis based on the quarterly report of March 2011. • In particular, the analysis takes into consideration the following areas: • The company structure: organized, social and regional presence • Evolution of financial returns for investors (NAV and Bond) and fundraising • Mikro Fund trend of investments analysis • Mikro Fund main business drivers critical analysis • Financial balance (assets and cash flows) 4

  5. PART 1 Group structure 5

  6. Key Messages • Mikro Kapital SARL is a Luxembourg company that manages Mikro Fund, it is a part of a structured group of financing and consulting • The owner of the group through direct and indirect participation is Vincenzo Trani, a founder and promoter of Mikro Kapital initiatives • A small part of Mikro Kapital assets belong to Giorgio Parola (10%), Mikro Leasing Belarus CEO, and to Denis Saklakov (5%), Mikro Kapital Russia CEO • Vincenzo Trani directly and through the Russian SIM General Invest owns 100% of Mikro Fund NAV • Mikro Fund presents a typical organizational structure required to a fund by the Luxembourg legislation as for a subject to the legal monitoring • The Fund operates in Russia and Byelorussia, has 10 offices and 42 direct employees 6

  7. Group structure CrossBorder JV Italian Company Local Government Italian holding 51% 24% Special Projects 25% Byelorussia 100% General Invest Russia Mikro Leasing Byelorussia Russia Luxembourg Italy Mikro Fund Russia Luxembourg Corporate Banking Corporate Banking Corporate Banking Trading Department Wealth Management Asset Management Commercial Banking Commercial Banking Corporate & Legal Investment Banking Private Banking Crossborder Support Trading Platform 7

  8. Shareholders map (diagram) TRANI Vincenzo President & CEO Founder TRANI Arena Enrica PAROLA Giorgio CEO Mikro Leasing SAKLAKOV Denis CEO Mikro Kapital Russiya 0.01% 100% 10.0% 5.0% 99.9% OOO BETA OIL Russia 78.26% 94.11% Mikro Fund NAV 85.0% 5.89% 21.74% General Invest LLC Russia Mikro Kapital Lux SARL Mikro Leasing Byelorussia Manages Mikro Fund Lux Russia Luxembourg 8

  9. Shareholders map(sheet) • Mr. G. Parola (CEO Mikro Leasing Belarus) owns the 10% of MK assets • Mr. D. Saklakov (CEO Mikro Kapital Russia) owns the 5% of MK assets • Mr. V. Trani owns the 100% of Mikro Fund NAV

  10. Mikro Fund Governance Namfex Russia - Consultant - Mikro Kapital Sarl Luxembourg - Asset Manager - Supervisory Board CALCOLO DEL NAV SUPPORTO TECNICO MIKRO FUND Carnelutti Rome Associated Law firm - Consultant - Fidomes Luxembourg - Consultant - Yakovlev & Partners Russia - Legal Consultant - JPA Luxembourg - Auditing- BANKS Banca Svizzera Italiana Lugano UBI Bank Luxembourg Trust National Bank Russia 10

  11. Mikro Kapital – Organized structure Impieghi

  12. Locations Russia Luxembourg 5 OFFICES • Moscow (3) • S.Pietroburgo • Krasnodar 1 OFFICE Saint Petersburg Mosow Byelorussia Krasnodar Luxemburg 5 OFFICES Italy Milan 3 OFFICES • Milan • Rome • Naples Rome Naples

  13. Offices & employees evolution • Employess: 68% increase in 6 months • Offices: twofold increase in 6 months in Russia and Byelorussia +100% +68% sept10 dic10 march11 sept10 dic10 march11 • The strategy of presence suppose the opening of the offices in strategical points: for example, in areas of low presence of banks that provide the credits (outside of Moscow) or in the border areas (Byelorussia) with high import-export flows • Strong increase of the new offices opening (from 5 to 10 in 6 months) and of employees (from 25 to 42). Every branch has a commercial staff and autonomy for the target investment decision to be submitted to Mikro KapitalCentral Committee 13

  14. PART 2 Investors information 14

  15. Key Messages • Investors participate through the NAV shares or through emission of short-term BOND • The founder V. Trani holds 100% of the NAV shares, while the bonds are spread over 31 investors (March 2011) • Since the date of launch (Sept. 2008) the NAV has filed a performance of +74%, while the cumulative Bond performance of +28% • Following the NAV growth and total BOND emission, the total Fund assets rose over € 23 million on March (+16% in 6 months) • Currently the ratio NAV/BOND is at 55% -45%, instead a maximum level amounting to 30% -70%. There is still an ample margin for issuing BONDS • Since the launch there is no NAV refund and even dividends distribution, while, on demand of some investors, the redemption has been repaid • The BOND Investors have grown to 31: institutional investors (with single ticket also exceeding € 1 million) and Professional investors 15

  16. Financial details Name Mikro Fund Luxembourg Registered address Currency Euro Target Target € 75 – 100 million (€ 24 million on February 2011) March 2011: 208.663 (+74% upon the date of emission) Last NAV Min Investment €125.000 Fund Administrator Mikro Kapital Sarl Reference Bank UBI Bank (Luxembourg) Auditor JPA Luxembourg Legal Advisor Yakovlev & Partners 16

  17. Performance evolution MikroFund NAV MikroKapital Bond Index Upon the date of emission +74% NAV +28% BOND Index MSCI World: all time low Subprime Crisis Tsunami in Japan Russian Wilefires Debt. of PIGS Greece's debt Ireland’s debt. Lehman’s downfall 17

  18. Evolution NAV and BOND (€) • Maximum leverage ratio: • With an Equity level of € 12,5 million the Fund may issue Bonds for additional € 20 million in accordance with the ratio D/E 30:70 • Mikro Fund equity level is of € 12,5 million on March, the increase is of 2,33 % on previous quarter • The participation of the of € 10,6 million. This value, while growing, represents less than 50% of the total assets • The diagram is presented the maximum amount of bonds that the Fund can emit (respecting the maximum leverage ratio of 30/70): a potential additional approximately to € 20 million 18

  19. Evolution NAV and BOND(%Assets) • The same diagram of the previous slide expressed in % • Maximum leverage ratio: • With an Equity level of € 12,5 million the Fund may issue Bonds for additional € 20 million in accordance with the ratio D/E 30:70 19

  20. Refund financial flows (NAV and BOND) • The participation in the Fund's NAV construe the long-term implies logic aligned to the business model (investments with 12-18 months expiration date). There is no NAV refund and even dividends distribution since 2008 • Although not envisaged in the Statute, the Fund reimburses however the shares to bondholders on request, where this does not compromise the financial balance of the Fund 20

  21. N. BOND-Investors growth Tot: 31 Tot: 22 Tot: 18 • High growth of the participation of Bondholders at the bottom: doubling in 6 months • Increasing of Professional investors • Minimum size Bondholders (€ 125.000) and large investors over € 1 million presence. 21

  22. N. BOND-Investors per country Tot: 31 Tot: 22 Tot: 18 • Strong representation of Italian investors (from 44% on Sept. 2010 to about two-thirds of the total on March 2011) • Stable participation of Swiss investors (about a quarter of the total on March 2011) 22

  23. PART 3 Recent Bond emissions 23

  24. Key Messages • The peculiar Fund business model (the capital disposal for loans to small and medium-sized enterprises) requires the consistent and recurring fundraising in € 1 – 3 million tranches a month. • In 2010 were emitted bonds for over € 8 million; and in the first half of 2011 have been emitted bonds complementarily for € 8 million. • The bond fundraising has not been affected by the periods of tension of the financial markets • The bond fundraising growth was accompanied by the NAV growth 24

  25. 7emissions 2010: € 8,2 million Jan. 2010 Apr 2010 May 2010 May 2010 € 3.000.000 Expiry date: Sept.2011 (24 months) €bor tax + 11.0% One month Coupon Min. denomination: 125.000 € € 300.000 Expiry date: April 2013 (24 months) €bor tax + 11.0% One month Coupon Min. denomination:125.000 € € 1.300.000 Expiry date: Nov.2011 (18 months) Fixed rate of interest 10.0% Quarter Coupon Min. denomination:125.000 € € 1.000.000 Expiry date: Nov.2011 (18 months) Fixed rate of interest 10.0% Quarter Coupon Min. denomination:125.000 € Sept. 2010 June 2010 Nov.2010 €1.125.000 Expiry date: March 2012 (18 months) Fixed rate of interest 10.0% Half-year Coupon Min. denomination:125.000 € € 500.000 Expiry date: May 2012 (18 months) Fixed rate of interest 8.50% Half-year Coupon Min. denomination:125.000 € €1.000.000 Expiry date: Jan 2012 (18 months) Fixed rate of interest 10.0% Quarter Coupon Min. denomination:125.000 € 25

  26. 7emissions 2011 (actual and pipeline): € 9 million Jan.2011 March 2011 Apr.2011 Apr.2011 € 1.000.000 Expiry date: July 2012 (18 months) Fixed rate of interest 10.0% Quarter Coupon Min. denomination:125.000 € € 1.000.000 Expiry date: Sept.2012 (18 months) Fixed rate of interest 9.0% Quarter Coupon Min. denomination:125.000 € € 1.125.000 Expiry date: Oct.2012 (18 months) Fixed rate of interest 9.0% Quarter Coupon Min. denomination:125.000 € € 500.000 Expiry date: Oct.2012 (18 months) Fixed rate of interest 8.0% Half-year Coupon 1 Investor May 2011 Apr.2011 July 2011 Sept.2011 [PIPELINE] € 1.700.000 Expiry date: Oct.2012 (18 months) Fixed rate of interest 9.0% Half-year Coupon 1 Investor € 1.500.000 Expiry date: Nov. 2012 (18 months) Fixed rate of interest 9.0% Quarter Coupon Min. denomination:125.000 € € 1.000.000 Expiry date: Jan.2013 (18 months) Fixed rate of interest 9.0% Quarter Coupon Min. denomination:125.000 € € 1.000.000 Expiry date: Oct.012 (18 months) Fixed rate of interest 9.0% Half-year Coupon Min. denomination: 125.000 € 26

  27. PART 4 Investments overview 27

  28. Key Messages • Until 2009 Mikro Kapital has operated directly from Luxembourg, providing funding to small and medium-sized enterprises in Russia • From 2009 were open the offices in Russia (Mikro Kapital Russia) and Byelorussia (Mikro Leasing); in addition, the Fund has also opened a "wholesale", channel for institutional operators which in turn allocate it to micro-enterprises in Russia • The opening of the new offices and indirect channel has facilitated the growth of the number of investments (303 investments on March 2011) permitted the dimensional, sectoral, geographical and expiry diversification. • There are a diversification of investments across the sectors. The sectors are largely related to the services: in fact, there are no sectors that require investment in durable goods or long-term investments. • The investments in small and medium enterprises represent approximately 92% of total assets; the activity is concentrated in Russia (84% of the investment) • The average investment varies in base of the channel: € 2,600 is through wholesale channel and up to € 150,000 for direct channel. The average of the total investments is approximately € 70,000 28

  29. Sector liabilities analysis • [to complete] 29

  30. Liabilities analysis • The 92% is invested in the core business (investments in Russia and Byelorussia) • The remaining 8% is invested in cash or other short-term activities • The Russian liabilities are about 84%, while the Byelorussian ones (activities match in 2009) is less than 8% in constant increasing Tot:23.0 m€ Tot: 20.7 m€ Tot: 19.8 m€ 30

  31. The number of clients growth Tot: 303 investments (Russia, Byelorussia) • The number of investments is growth twofold in one quarter • The growth of new investment both for direct channel (Mikro Kapital & Mikro Leasing) and through institutional operators in "wholesale“ mode • Thanks to "wholesale" it is possible to reach a significant number of micro-enterprises Investments through wholesale structures MICRO interprise MID interprise Tot: 149 investments(Russia, Byelorussia) Mikro Kapital and Mikro Leasing direct investments SMALL interprise 31

  32. Assets & Liabilities (March 31st 2011) Total Assets 23.022.121€ Total Liabilities 23.022.121€ Total Asset 23.022.121 € 303 Final Clients Medium size per client: 69.719 € Investments in Russia Total: 19.243.483 million Clients: 189 Average: 101.800€ Details: • 122 direct clients with medium size of €156.317 • 67 indirect clients with medium size of €2.579 Equity 12.472.121 € (54%) Russia (19,2 million) BONDS 10.550.000 € (46%) Investments in Belarus Total: 1.881.279m Clients: 114 Average: 16.502€ Belarus (1,9ml.) Other Asset (1,8million) Cash (0,01 million) 32

  33. Investments map (March 31st 2011) Luxembourg (23.022.121 € - 100.0%) Impieghi Cash & Equivalents 1.897.359 € (8.2%) Investment Flows (21.124.762 € - 91.8%) for 303 final clients. Mikro Leasing Byelorussia 1.881.279 € (8.2%) 114 clients 19.243.483 € (83.6%) 189 clients Russia Institutional organizations Institutional organizations 19.070.663 € (82.8%) 122 clients 1.881.279 € (8.2%) 114 clients 172.820 € (0.75%) 67 clients 0 € (0.0%) Final investiment Final investment Final investiment Final investment

  34. PART 5 Risk Management: Business drivers 34

  35. Key Messages • There are a diversification of investments across the sectors. The sectors are largely related to the services: in fact, there are no sectors that require investment in durable goods or long-term investments. • All investments are made against pledge. • The Fund's track record shows that there are no legal proceedings • No investment has never been given rise to default • The data to measure the Portfolio At Risk, Par 30 and Par 90, have both low values, between the 1,15% and 1,56% • The Fund minimizes the Exchange rate exposure: over 90% of total assets is used in Euro. 35

  36. Investments against pledge only • Since the beginning of its activity in 2008 Mikro Fund has invested against a pledge only • The pledge may be represented by Real Estate, personal property of the contractor and his family (or the first line management), or vehicles • The pledge multiple generally is between 1.0x and 3.0x. • Currently the pledges represent about 130% of the Fundassets The pledge assets currently amount € 28 million, about 130% of the total Fundassets 36

  37. Extrajudical settlements Number of legal proceedings Number of clients in state of default Evoluzione del N. di clienti falliti • The Fund has never had open any legal proceeding: in case some company are not able to pay an installment, it is trying to agree in some other way with Mikro Fund to not lose the pledge • The pledge has the function of selection the solid companies for financing 37

  38. The PAR (Portfolio At Risk) is negligible Portfolio At Risk evolution • The PAR (Portfolio At Risk) has an extremely low values, both for PAR30 and for PAR90. • The PAR on March 2011 is equal to 300.000€, representing about 1,5% of the portfolio. • In Russia the PAR30 and PAR90 coincide: the are no delays over 30 days 38

  39. Exchange rate exposure: 90% of portfolio is allocated to euros Exchange rate esposure - € countervalue Exchange rate esposure – contracts number • 90% of portfolio is allocated to EUR • The Fund investments in Euros are for over 90% of the portfolio. The remaining 10% are in Rubles, while there are no employs in Byelorussian Rubles. • The investments in Rubles represent less than 10% of amount but approximately 45% of the number of contracts: investments in Ruble are extremely fractionated (the Ruble-denominated contract countervalue is € 17,000, meanwhile for Euro-denominated contracts is € 128,000) 39

  40. PART 6 Financial balance analysis 40

  41. Key Messages • The balance of the financial structure is measured as financial flows, assets, receivables & payables. • In regard to the financial flows, the trade-off occurs among the 18 months bond expiry dates and the expected cash flows. In particular, in March 2011 the inflows amount is about € 3.5m, while the amount due for payment is € 3.2m. The expiry date of April 2011 was compensated. • In regard to the assets, the leverage equity/ medium and long term loans is 1,5. The short-term loans represent more then 25% of the bonds. • In regard to the receivables & payables, in 2001 and 2012 whereas the gradual repayment of receivables, the payables constitute 5% of the total fund assets. • The bond expiry dates issued in 2010-2011 is DOUBLE in comparison to the duration. 41

  42. Credits amount due in next 3 months • The Fund credits in Russia and Byelorussia are short-term (duration is 9 months only) • The short duration combined to the high number of customers ensure significant cash flows to cover obligations. • The situation on March 2011 shows that in the credit amount due next quarter (April – June 2011) is about € 3.5 million, which corresponds to 17% of the total fund assets. • The clients have the roll-over opportunity As % total asset 5.4% 16.8% 4.2% 42

  43. BOND duration • The Bond duration is 9 months only. • Thanks to: • French refund method: capital & interests from the first month. • Funding for short-term financial requirement. • Frequently this type of funding are reimbursedbefore the expiration date. • Funding expiration date are 2x on bond issued expiration date. 43

  44. Fixed assets cover margin • On March the NAV represents 55% of the sources and cover the long term investments (33% of the sources) • There is a compensation between the short term investments (€ 12.6 million) and the bonds issued (€ 10 million) • Equity / LT Investments: 1.55x • ST Investments / Bond: 1.27x • xxx (*) Long Term: “Equity / Long TermInvestment”. Short Term: “Short TermInvestment / Total BOND” 44

  45. Bond expiry date & refund Today (June 30 2011) Total Fund Asset (=100%) Refund BOND (% on Total Fund Asset) • Thanks to the monthly tactics of the monthly Bond inflows, the expiry dates are not concentrated in single events but distributed in the time. The incidence normally is by 5% on the Total Fund Assets. • On April 2011 was refunded a €3.2 million bond emitted on October 2009. 45

  46. Contacts MikroKapital s.a.r.l. c/o Fidomes Ltd 75, Parc D’Activites Capellen Grand Duche’ de Luxembourg Europe: +39 02 4070 0850 info@mikrokapital.com www.mikrokapital.com 46

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