BPH Property Fund

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The proposed project considers creation of a Polish on-shore closed-end property fund, to be managed by BPH TFI, a Fund Management Company. The Fund’s objective will be to pursue long-term equity gains through investment in medium size real estate including office, warehousing and retail in Poland and possibly in other Central and Eastern European Countries. The Fund will be publicly traded on the secondary market of Warsaw Stock Exchange (“WSE”), subject to WSE’s acceptance. The Bank’s investment in the Fund would support creation of an on-shore listed vehicle denominated in the local currency that shall provide the domestic institutional and individual investors with the possibility to invest in real estate. The project will also contribute to creation of secondary market for quality real estate projects developed in Poland. The Bank’s involvement will ensure creation of a market standard for this still new instrument in the market. BPH TFI, a Fund management company established in 1998, 61% owned by Bank BPH S.A. (through a 100% owned special purpose vehicle, BPH PBK Fund Management) and 39% by Capital Invest (100% owned by Bank Austria Creditanstalt AG). BPH Bank is majority owned by HVB Group. BPH TFI creates and manages investment funds for retail and institutional clients in Poland. The funds invest the entrusted resources in financial instruments on the capital and money markets. As of 31 March 2005 the volume of assets allocated in 12 of the BPH TFI’s funds was approximately Euro 360 million. The lesser of PLN 58.2 million (Euro 13.2 million) and 15% of the Fund, subject to the final size of the Fund and minimum closing amount. Up to PLN 388 million (approximately Euro 93 million equivalent). Screened FI. The Fund will be required to implement the Bank’s Environmental Procedures for Property Development and Acquisition Funds to conduct environmental due diligence and monitoring of each sub-project, to ensure that each sub-project complies with relevant national and EU environmental, health and safety standard and requirements and to submit annual report on environmental, health and safety issues to the Bank. None. Mr. Rafal Mania, Chief Executive Officer BPH TFI S.A. Warsaw Financial Center 53 Emilii Plater Str. 00-113 Warsaw, Poland phone: +48-22-520-9799 fax: +48-22-520-9798