FK ŽELJEZNIČAR 1921Outstanding Sports Investment Opportunity

April, 2014

The opportunity

Potential investors are being presented with an unique opportunity to invest into the most successful football club in Bosnia and Herzegovina (“BiH”) and historically one of the most successful in the Balkans region, FK Željezničar (“Željezničar” or “the Club” or “Željo”).

Investment highlights

Brand recognition, history and experience: FK Željezničar exists since 1921. It has outlived number of armed conflicts. Due to the love and support of the community and its supporters the Club is today recognised brand across different generations, regions and demographics.

Talent base: Throughout its history FK Željezničar youth development program has produced players that have left footprint on a regional and European football scene (e.g. five players from the current Bosnian National Team which will play at the 2014 World Cup in Brasil and play in some of the best European leagues started their career in FK Željezničar). Thus, the Club has proven history in high-quality work with the youth and possibility of setting up football academy enabling youth and talent development and further cooperation with FK Željezničar represents an opportunity.

Fans: Substantial supporter base is mainly from Sarajevo and surrounding areas. Organised smaller groups exists in number of other cities across Bosnia and Herzegovina and internationally (Bosnian Diaspora). The biggest and the most devoted fan base in BiH and amongst the biggest in the Balkans region.

Development: Even under current strained financial structure, the Club continuously succeeds in producing young talent and has won national Championships in the three of the last four years, thus also qualifying to the Champions League initial stages. This provides excellent platform for further development and advancement to higher stages of Champions League/Europe League in the case of improved financial structure.

Stadium: In addition, there is an opportunity to develop stadium in a central location in the Sarajevo City on a freehold land owned by the Club and leave unprecedented mark in the regional and local community.

Other cash generating capacities: Numerous additional development angles are available to implement at a low cost to increase revenue.

Current financial performance: In 2013, the total revenue amounted to EUR 1 milion (2012: 1.5 milion).

Sarajevo

FK Željezničar | Bosnia and Herzegovina | Sarajevo The Opportunity

The strategic direction to seek for a reputable investor by FK Zeljeznicar is mainly to increase its competitiveness to the international level. To achieve that, the following investments are required:

1) Development of practice facilities for Youth program

2) Development of Stadium and supporting infrastructure

FK Željezničar | Bosnia and Herzegovina | Sarajevo The Opportunity – Investor’s perspective

Capturing on “Know How”

Return on Investment(Cost vs. Benefits)

■ Comparatively speaking, investment into FK Željezničar may be regarded as low compared to the other European available options. At the same time financial benefits accruing from increase in the value of the players, premiums for competing at the European level, monetising on other aspects of operations can be substantial and outweigh the risk of the investment.

■ As indicated elsewhere in the document this may be a unique opportunity for a foreign investor to capture on some of the successful practices in attracting, developing and retaining talent. On the other hand, the Club could substantially benefit by adopting some of the best practices in managing sport organisation.

Benefits of first mover advantage and becoming a

regional centre.

■ Given the favourable geographical position and multiethnic heritage, FK Zeljeznicar can easily become a regional centre for talent development in Balkans region (population of some cc. 20 mil. people).

FK Željezničar has developed a number of investment concepts. However, it will be willing to consider any proposed model from a qualified investor. Further

information will be available upon formal expression of interest.

■ An investment provides a solid mix of intangibles (described above) and tangibles (land and stadiums) where any of the desired development concepts can be considered. Further, there is a strong support by a local and state government committed to provide any assistance and support required in development of infrastructure.

Real Estate

FK Željezničar | Bosnia and Herzegovina | SarajevoGlance at Bosnia and Herzegovina

Bosnia and Herzegovina

BiH has been enjoying a growing reputation as a football nation with much of that success being attributable to the national team qualifying to the World Cup 2014 in Brazil. This was not an isolated event: Bosnian football teams are more and more successful in European competitions, Bosnian youth teams are increasing their wining ratios and Bosnian-origin players in diaspora are selecting Bosnia as their national team. In addition, impressive football results also had a spill-over effects on other sports (e.g. basketball, handball etc).

Culturally, there is a strong identification with the Bosnian athletes which have made successful international careers

As an emerging and developing European country with prospects for EU integration, Bosnian economy has strong ties to European Union and the rest of the Balkans region, which creates good potential for further economic growth.

Bosnia and Herzegovina (continued)

The country has great potential in particular in tourism and energy sectors.

Potential for increased general export competitiveness is still high.

On-going public investment in infrastructure are expected to contribute to increased economic activity.

Much of the sports infrastructure in the country was destroyed in the war in the 90’s, with large reconstruction needs still pending. Many stadiums in BiH are ageing and require rehabilitation / renovation.

Is annual rate at which Bosnian real GDP is expected to grow in medium – term according to the IMF projections.

3-4%

FK Željezničar | Bosnia and Herzegovina | SarajevoGlance at the City of Sarajevo

Sarajevo is becoming an established tourist destination, offering a rich history . “Sarajevo, place where East meets West”

Is an average annual increase of total visitors to Sarajevo over the past number of years, a trend which is expected to continue in the future according to Tourist bureau of Sarajevo Canton.

10.8%

FK Željezničar | Bosnia and Herzegovina | SarajevoFootball players with BiH origin fall within top class accross the Europe

# NameClub

(abreviated) LeagueNational

teamPlace of birth

or origin

Market Value

In EUR'mil

1 S. Handanovic Inter Italy Slovenia BiH Roots 24 2 D. Lovren Southampton UK Croatia Zenica, BiH 12 3 N. Subotic B. Dortmund Germany Serbia Banja Luka, BiH 20 4 V. Corluka Lokomotiv Russia Croatia Derventa, BiH 10 5 J. Ilicic Florenz Italy Slovenia Prijedor, BiH 8 6 M. Marin Sevilla Spain Germany B. Gradiska, BiH 5 7 A. Halilovic Dinamo Croatia Croatia BIH Roots 6,58 M. Pjanic Roma Italy BiH Tuzla, BiH 209 I. Rakitic Sevilla Spain Croatia Zepce, BiH 20

10 E. Dzeko MCS UK BiH Sarajevo, BiH 2411 Z. Ibrahimovic PSG France Sw eden Bijeljina, BiH 28

- - - 178

Illustative example of high profile players w ith Bosnian origin

Source: Transf ermarkt.de

Eur 178 milMarket value of selection of players with the Bosnian origin according to Trasfermarkt.de.

As illustrated, some of the best players across the Europe originated from BiH.

This can be concidered as a strong business case for investing in football teams and infrastructure in order to support the early development of Bosnian football players.

1

2

87

3

6

4 5

9

1011

FK Željezničar | Bosnia and Herzegovina | SarajevoFootball players with BiH origin fall within top class accross the Europe

And, historically, it has been that way………

8

5

7 9

10116

1

32 4

# NameClub

(abreviated) LeagueNational

team Origin

1 E. Maric Schalke 04 Germany Yugoslavia BiH2 R. Sabanadovic AEK Athens Greece Yugoslavia BiH3 S. Barbarez Hamburger Germany BiH BiH4 B. Sliskovic Marseille France Yugoslavia BiH5 F. Hadzibegic Sochaux France Yugoslavia BiH6 D. Bajevic AEK Athens Greece Yugoslavia BiH7 M. Bazdarevic Sochaux France Yugoslavia BiH8 S. Susic PSG France Yugoslavia BiH9 H. Salihamidzic Bayern Germany BiH BiH

10 M. Kodro Barcelona Spain BiH BiH11 V. Halilhodzic PSG France Yugoslavia BiH

Illustative example of former players w ith Bosnian origin

“Željo is life philosophy. It is not only football, it is a way of living and behaving. For me it about sitting on the Malta bridge, talk about everything and then go for a drink. Željo always had a meaning of something that connects wonderful people who help each other ”

IVICA OSIM Former FK Željezničar football player and Coach.

Also coached national teams of former Yugoslavia and Japan, as well as the number of other international clubs.

FK Željezničar | Bosnia and Herzegovina | SarajevoAbout FK Željezničar

FK Željezničar – Fact sheet

Legal status: The Club, Non for profit organisation registered under the laws of Bosnia and Herzegovina (“BiH”)

Year of establishment: 19 September 1921.

Stadium: Grbavica stadium (in ownership), current capacity 12,000

League: Premiere League in BiH.

League titles: Former Yugoslavia: 1972, BiH: 1998, 2001, 2002, 2010, 2012, 2013.

Cup titles: Former Yugoslavia: runner up 1981BiH: 2000, 2001, 2003, 2011, 2012.

European Championships : UEFA CUP semi-final 1985

Fan base: unoficial estimate: 100,000

FK Željezničar | Bosnia and Herzegovina | Sarajevo About FK Željezničar – Youth program

Number of kids under the age of 8,9 and 10

65Number of kids under the age of 11,12 and 13

110Number of kids under the age of 14,15 and 16

162Under 18’s

112

Youth Program

FK Željezničar’s youth program is amongst the best in the BiH, measured by the number of players having an international and national football career, one of them being Edin Dzeko., leading star of the Bosnia n national team and the player of Manchester City in the English Premiere League.

The program has grown over 10%, over the past few years, mainly on the back of the success of the first team.

As currently set-up Zeljo’s football program covers only greater Sarajevo areas (i.e. 9 Sarajevo municipalities, a population of some 400 thousand).

12 coaches work with our

younger players under

supervision and coordination of

Amar Osim, th

e Club’s General

Manager. They are supporte

d

with staff of six people.

FK Željezničar | Bosnia and Herzegovina | SarajevoAbout FK Željezničar – Youth program (Continued)

Youth Program

Extract of some of the active players from FK Željezničar Academy and their market value according to Transfermarkt.de:

# Name Current club Market value in EUR’000

EDIN DŽEKO Manchester City 24,000

EDIN VIŠĆA Istanbul BB 2,500

ERVIN ZUKANOVIĆ KAA Gent 2,000

AVDIJA VRŠAJEVIĆ HNK Hajduk 2,000

EDIN COCALIĆ Maccabi Haifa 1,000

SEMIR ŠTILIĆ Wisla Krakau 1,000

KENAN HASAGIĆ Vereinslos 800

IBRAHIM ŠEHIĆ Qarabag Agdam 600

MUAMER SVRAKA FK Željezničar 500

ARMIN HODŽIĆ FK Željezničar 225

1

2

8

7

3

6

4

5

9

10Equally important are Zeljo’s alumni players which have made successful international careers. List of those players is quite comprehensive.

National Team

players

Frequently also on the roster for national team

Eur 34,6 mil¸Today’s market value of selected players originated from Zeljo’s academy.

22%of expected BiH players in the World Cup originated from Zeljo’s football academy.

FK Željezničar | Bosnia and Herzegovina | SarajevoAbout FK Željezničar – The Investment concept

The Investment Concept

The investment concept envisages rolling out Zeljo football academy in five different cities across the BiH under the standardised level of quality of work.

Ultimately, the goals are twofold:

1) to prevent, to the extent possible, future talent leaving at an early stage

2) To financially benefit from the talent development at a future date from transfer fees.

The Investment, in total, has been assessed at cost of EUR 2 – 3 milion: with the possibility to implement project in stages.

Under the existing operating model the Club is missing on the number of revenue streams, namely: naming rights, concession revenue, parking fees and rental fees and additional entrainment event hosting.

In addition, number of additional areas remained fully unexploited (e.g. commissions from the sale of sports uniforms, authors rights, TV Broadcasting fees which remain at the low level etc.

Executive Board of Željezničar comprises of successful business people from some of the most successful local and and international companies who are die-hard Željo fans. This ensures availability of the expertise of all the relevant business procedures and business connections for a potential investor.

45 thousand sqmSqm of land under the stadium and its surroundings is located in the very urban part of Sarajevo City.

FK Željezničar | Bosnia and Herzegovina | Sarajevo About FK Željezničar – The Stadium concept

14,000Average number of supporters for European Competition games over the past three years.

FK Željezničar | Bosnia and Herzegovina | Sarajevo

About FK Željezničar – The Stadium concept (Continued)

One of the investment angles is the stadium development.

Number of available concepts exists and any shortfall in comercial feasibility of the development may be subsidies via number of available alternatives (e.g. Government grants, UEFA / FIFA funds, EU Funds etc.) .

Consideration would be given to renaming the stadium as:

“Grbavica – name of the partner”. As usual, this is subject to obtaining all the relevant internal approvals.

Unique emotional ties to Željo are a characteristic of both Željo fans and players.This is, for example, exhibited in the recent UK interviews of Edin Dzeko, the biggest star of the Bosnian national team and Manchester City player, who started his career in Željo.

“It is not said without the reason that Željo is more than just the football.”

FK Željezničar | Bosnia and Herzegovina | Sarajevo

NEXT STEPS

If you find this opportunity interesting we would be very honoured to invite you to visit us in Sarajevo and discuss potential ideas to see whether we can find any common interest in this respect.

FK Zeljeznicar’s contact detals are given below.

Disclaimer

This document was prepared in April 2014. All information in this document is provided as a general outline only for the guidance of intending purchasers and constitutes neither the whole nor any part of an offer or contract; (ii) all descriptions, dimensions, references to condition, financial information and necessary permissions for use and occupation and other details may be summary and may have been provided by third parties but are given in good faith and are believed to be correct, but any intending purchasers should not rely on them as statements or representations of fact but should satisfy themselves by searches, enquiries, surveys and inspections or otherwise as to the correctness of each of them.

FK ŽeljezničarZvornička 2771000 SarajevoBosnia i Herzegovina

Almir Gredić Mirsad Šiljak

President of the Club Director of the Club

Tel: +387 61 173 768 Tel: +387 61 144 503

almir.gredic@unicreditgroup.ba director@fkzelljeznicar.com