IN THE NAME OF GOD

THE MOST COMPASSIONATE,

THE MERCIFUL

Construction Fund

Securities and Exchange Organization

Definition & Objectives 1

Steps for launching a Construction Fund2

Net Asset Value per unit (NAV)3

Construction Sale6

NAV Calculation process4

Acceptable Expenditures5

CONTENT

7 Liquidation process

Construction Fund is a financial institution, which is authorized by SEO as an independent legal entity; (in Iran in form of a noncommercial institute)

1. DEFINITION & OBJECTIVES

Object of Construction Fund: To collect macro & micro savings, devote them to build specified Constructing Project, sell the construction & eventually distribute obtained benefits among investors.

2 .STEPS FOR LAUNCHING A CONSTRUCTION FUND

Establishment license & public offering permission

Selecting

ProjectFund Manager

Preparing article of association, prospectus, business plan & cash flow, along with related documents Investors

Appointing Governing & Supervisory Bodies

ConstructorSupervisor

Trustee

Secondary Market

Market maker

Underwriter

STEPS FOR LAUNCHING A CONSTRUCTION FUNDINITIAL PUBLIC OFFERING

INITIAL PUBLIC OFFERING

SPENDING MONEY ON PHASE 1

SPENDING MONEY ON PHASE 1

SECONDARY MARKET FOR UNITS

SECONDARY MARKET FOR UNITS

CAPITAL RISING

Investors

SEO

Board of Directors

Fund Manager

Proposing Capital Rising according to Business Plan

Approving Capital Rising

Requesting Permission for public offering

Issuing the Permission for public offering

CAPITAL RISING

3. NET ASSET VALUE PER UNIT

Net Asset

Value per unit

Project Value Liabilities

Outstanding Units

Other Assets

1- (Percentages of up front selling)× + -

Space sold in advance, divided by sum of utilizable space

Sum of the following at Cost or Replacement Value: • Field• Labor Expenditures• Consumed materials• Equipments & plants• Other Expenditures

Includes : • Cash• Receivables• Prepayments• Securities• Investments

NAV

Includes all liabilities except liabilities arises from up front selling

4. NAV CALCULATION PROCESS

Board of Directors

Auditor

Chartered Assessor

Renders to

Disclosure to the public

Clean Report/with Immaterial Paragraphs

Audit Report

Replacement Value for Assets & Expenditures

List of Assets

Financial Statements(At end of each 3 months period)

Financial Statement

Fund Manager

Expresses

Opinion

Nominate Chartered

Assessors

Prepares

Appoints

List of Assets & Expenditures

5. ACCEPTABLE EXPENDITURESField & Acquisition

Costs

Fees payable to Governing & Supervisory

Bodies

Architectonics

Project Implementation

Costs

FoundationCosts

Licenses & Permission Costs

Advertisement Costs

InsuranceCosts

Chartered Assessors Fees

Finance costs

Costs

Qualified individuals who

apply for participating in

auction & render their bid price

Executes the auction along with regulations & Assembly & Board of Directors Approvals

Approves:• Basic Price• Ads budget

• Financial statements

6. CONSTRUCTION SALE

Those who have rendered the best bid price are appointed as

winners

Offers :• Auction documents

• Ads budget• Draft contracts

• Basic Price

• Newspapers & magazines

• Websites• TV & RadioAdvertising

Applicants

WinnersFund Manager

General Assembly

Board of Directors

Trustee

Qualified individuals who

apply for participating in

auction & render their bid price

• Newspapers & magazines

• Websites• TV & Radio

Those who have rendered the best bid price are appointed as

winners

Offers:• Auction documents

• Ads budget• Draft contracts

• Basic Price

Approves:• Basic Price• Ads budget

• Financial Statements

Executes the auction along with regulations

and Assembly & Board of Directors

Approvals

7 .LIQUIDATION

PROCESS

1- Fund Manager executes the auction process according to related regulations,Article of Association and Assembly & Board Approvals to sell out the construction.2- Fund Manager makes his effort to liquid other assets (including receivables), & avoids acquisition of new assets. 3- Fund Manager settles all the matured liabilities, under the trustee supervision(Fund Manager & Trustee fees are exception) 4-Fund Manager prepares the Funds’ financial statements & performance reports and renders them to the Auditor by the end of first part of liquidation period (at this time all or almost all assets are liquidated).

5- Auditor announces his opinion about financial statements & performance report to SEO, Fund Manager & Trustee. 6- If the auditor report is clean, Fund Manager pays to investors an amount not less than 80% of cash reflected in financial statements, nor more than the total net Asset value of outstanding units .Units cannot be traded from 5 days before the payment day. 7- After mentioned payment, an announcement issued by Fund Manager declares the results; then unit trading is permitted. Above steps should be repeated, at least every 3 months, until the liquidation of all assets. 8- When the Construction is sold out, unit trading is not allowed. Fund Manager redeems all units at price equal to replacement NAV. Fund Managerprepares final reports which should be audited then.9- Equity account is settled, the balance (if exists) is transmitted to Fund Managers' account after approval of Trustee. The rest of liabilities, including Governing & Supervisory Bodies’ fees (except Fund Manager Fees), Should be paid then. If there is not enough cash in fund accounts, Fund Manager would provide the rest.

10- Fund Manager is responsible for preparing the deed notes for construction buyers. This duty is done by the Fund Manager on behalf of the Fund. The related costs are charged from liquidation fee provision account ( in case the provision is not adequate, the Fund Manager would take on charges).

11-All of the commitments are performed & Fund Manager’ receivables are settled & rest of assets are transferred to the Fund Manager for the final liquidation stage.

Thank you

REPLACEMENT VALUE

Field

Equippingworkhouse

Plans &Designation

Material in Process

License

Installation & set up

Replacement Value

Fund Manager

Supervisor

Liquidity guarantor

Board of Directors

AuditorTrustee

Underwriter

GOVERNING & SUPERVISORY BODIES FEES

Constructor MarketMaker

Fund Manager

Assembly

Constructor

Supervisor

Trustee Underwriter

MarketMaker

Auditor

Board of Directors

GOVERNING & SUPERVISORY BODIES OF CONSTRUCTION FUND

Approving construction plan of the Project

Taking part in Funds’ assembly sessions & voting on behalf of absent investors

Supervising other Bodies to make sure they perform their responsibilities & pursue probable violations.

Provide liquidity of Fund units with regard to related directives & requirements of prospectus (price deviation limit, quote range & minimum daily transaction)

Liquidity guarantor

Purchasing that part of Construction which has not been sold during the liquidation period

Performing the Project independently or having it done by qualified Contractors (Managing the construction project)

Rendering physical progress reports to supervisor

Steps for Launching

Underwriting Fund units in IPOs

Front office of the Fund (specially in unit issuing)

Recording units transactions, if the Fund is not listed in an exchange

Underwri ter

Capital Rising

Fund Managerkeeping investors’ accounts

Participating in issuing units process

Order payments after approved by Trustee

Proposing capital rising and other financing resources to the board of directors

Book keeping and Preparing financial statements

Calculating net asset value per unit

Setting up Fund software & website

Performing auctions & tender

Representing the Fund against third interested parties

Capital Rising

Steps for Launching

NAV Calculatio

n

Performing the Project independently or having it done by qualified Contractors (Managing the construction project)

Rendering physical progress reports to supervisor

Rendering financial progress reports to Fund Manager

Const ructor

Steps for Launching

Approving construction plan of the Project

Supervising the construction to be along with construction plan & national construction Laws & Regulations

Approving physical progress reports

Preparing periodic progress reports

Executing duties of a supervisor according to “ Framework of Engineering & Control of Constructions Law”

Supervisor

Steps for Launching

TrusteeTaking part in Funds’ assembly sessions & voting on behalf of absent investors

Supervising other Bodies to make sure they perform their responsibilities & pursue probable violations.

Considering & approving Fund Managers’ appeal for opening new bank accounts

Nominate auditor to be appointed by General Assembly

Approving Fund Manager reconciliations of debates

Supervising the authenticity of auctions or tenders

Determining how Funds’ securities should be maintained

Steps for Launching

Market Maker

Provide liquidity of Fund units with regard to related directives & requirements of prospectus (price deviation limit, quote range & minimum daily transaction)

Steps for Launching

Board of Direc tor

Approving the amount and methods of Financing or Capital rising

Approving qualification of Constructor & its nominated Contractors to execute each stage

Making necessary decisions about auctions and tenders

Determine Constructor responsibility, when there is delay in construction operations

Change the charges and/or schedule of the Project when it is necessary

Capital Rising

Steps for Launching

NAV Calculatio

n

Audi tor

Supervising on authenticity of Book keeping

Expressing opinions on NAV calculations

Expressing opinions on Fund Managers’ reports to assembly

Steps for Launching

NAV Calculatio

n

MARKET MAKERS’ FUNCTIONALIT

Closing Price of yesterday

200

Price Limit (10%)

220180Bid Ask

Quote Range

Steps for Launching

Risk Analyses

Financial Analyses

Technical Analyses

Market Analyses

General Information

Construction process & plan

Detailed Expenditures (Endured & Predicted)

Detailed Maps

BUSINESS PLAN

1 Full text of article of Association & Prospectus

2 Financial Statements

3 Monthly Progress Reports

4 Market Makers’ Bid & Ask Quotes

5 NAV Reports both in Cost & Replacement Value

6 Announcements of General Assembly Meetings

7 Announcements about Capital Rising (Effecting Date & Capital Rising Results)

INFORMATION TO BE DISCLOSED THROUGH FUND WEBSITE

8 Any other reports requested by SEO