Letter to shareholders – Communication

Dear Shareholder,

We would like to give you the latest update with regards to your Fund namely Brickstone Fund SICAV plc – Brickstone Growth and Development Fund

It is very evident to all that the situation that has arisen both in Ukraine and in Russia a couple of years after the Fund was set up is one that was not foreseen and it appears also that the World at large does not seem to be giving so much importance.

Looking back the Board of Directors and the members of the Investment Committee felt that this situation would have been short-lived and the situation would return to normality, but 2018 and 2019 have shown a different situation.

As you are all aware the Brickstone Growth & Development Fund has three different projects namely:

    1. 1. The 5-stars hotel in St Petersburg (Russia);
    1. 2. The 4-stars hotel in Novosibirsk (Russia);
    1. 3. The plot of Land in Kryvoy Rog (Ukraine);

The two hotels are proving to be almost self-sufficient and do not need further investment whit the plot of land in Ukraine which is earmarked for a shopping complex needs massive investment.

In 2018, hotel management of the two hotels provided better results which were set out in the optimistic budgets.

For St Petersburg, at GOP Level our results are above our expectations. The year has been challenging and very demanding due to the presence of FIFA 2018 in the city and other Events (WEF and Legal Forum). Having said that, we would highlight that the budget was reached and superseded thanks especially to the World Economic Forum and World Cup (where the budgeted targets were set very High).

As for Novosibirsk the hotel performance is to be considered very satisfactory as it reaches the budget objectives set for 2018 in terms of Gross Operating Profit. The GOP results 2018 were up +30% compared with the 2017 final figures.

The growth has been driven by a growth of Occupancy as well as a growth of ADR and consequentially a growth in terms Revenue per Available Room.

Despite not reaching the results expected in Budget Revenues, there are several positive factors that have contributed to the profitability growth and they are mostly due to the business mix generated.

First of all, a significant growth of Direct Business generated versus the previous year but also Partners business (Travel Agents and Companies) has shown positive growth.

Notwithstanding any (physical real estate) evaluation on the hotel, our outlook remains positive, especially as the possibility of this international crisis must be resolved and the real intrinsic real estate value of the two hotels will be shown.

The scenario with regards of the land in the city of Kryvoy Rog is still unclear due to the international crisis of Ukraine, but also the deep internal crisis, in the country but hopefully with the appointment of the new president we hope that things will change. The Board of directors together with the IC committee is considering different options in the interest of all shareholders.

At present it is too early to express publicly what is being considered as the situation is also still developing but of course we will not fail to keep you updated on future developments as soon as we have more certainties.

Finally, with regards to our liquidity situation this remains challenging especially in view of the fact that the NAV which should be concluded in the next couple of months will reflect a low value in view of the intrinsic value being placed on the properties within the Fund.

From our end we remain committed to minimize costs as much as possible and try and attract new but few investors to the Fund to cover the expenses but bearing in mind also to not penalize the current shareholders by dilution of their shareholding.

Yours Sincerely,

Luigi Pesce