Final Results

11 March 2013

Raven Russia Limited ("Raven Russia" or the "Company")

Results for the year ended 31 December 2012

The Board of Raven Russia releases the results for the year ended 31 December 2012.

Financial Highlights

·; NOI up 49% from $91.7 million to $136.5 million

·; Underlying operating profit up 63% from $68.9 million to $112.1 million

·; Underlying earnings before tax increases from $8.1 million to $34.7 million

·; IFRS operating profit before revaluation of properties up from $57.8 million to $84.4 million

·; Operating cash flows increase from $81.6 million to $120.7 million

·; Today's annualised NOI (including PLAs and LOIs on current developments) $179.7 million

·; Year end gearing (post acquisitions) 44.1% (2011: 38.1%)

·; Year end cash $191.7 million (2011: $181.8 million)

·; Underlying basic EPS 5.30 cents per share (2011: 0.18 cents)

·; Final distribution up 29% to 2.25p per share

·; Total distribution up 25% to 3.75p per share (represents a yield of 5.7% at current price)

·; Tender offer buy back of 1 in 33 ordinary shares at 75p

·; Adjusted diluted NAV per share 125 cents (2011:119 cents)

Business Highlights

·; Acquisition of Pushkino, a grade A fully let Moscow warehouse comprising 214,000 sqm with annualised NOI of $25.8 million for a consideration of $218 million, an initial yield of 11.8%

·; Acquisition of Sholokhovo, a grade A fully let Moscow warehouse comprising 45,000 sqm with annualised NOI of $6.1 million for a consideration of $50.5 million, an initial yield of 12.1%

·; Acquisition of 38 hectares of permitted land at Padikova, Moscow for a consideration of $23 million where we can build 197,000 sqm of space over time

·; Issue of 48.4 million new preference shares to institutional investors at a price of 134p (representing a yield of 9%) to assist with the funding of these acquisitions

Chairman Richard Jewson said "The Group is making very good progress. Lettings have continued in an undersupplied market, finance facility maturities have been extended and important earnings enhancing acquisitions made. It has been a busy and fulfilling year."

Enquiries

Raven Russia Limited Tel: + 44 (0) 1481 712955

Anton Bilton

Glyn Hirsch

Cardew Group Tel: + 44 (0) 207 930 0777

Alexandra Stoneham

N+1 Singer Tel: +44 (0) 20 7496 3000

Corporate Finance- James Maxwell

Sales - Alan Geeves / James Waterlow

About Raven Russia

Raven Russia was founded in 2005 to invest in class A warehouse complexes in Russia and lease to Russian and International tenants. Its Ordinary Shares, Preference Shares and Warrants are listed on the Main Market of the London Stock Exchange with a market capitalisation of approximately £350 million. The company operates out of offices in Guernsey, Moscow and Cyprus and has to date completed a portfolio of circa 1.3 million square metres of Grade "A" warehouses in Moscow, St Petersburg, Rostov-on-Don and Novosibirsk. For further information visit the Company's website: www.ravenrussia.com

Chairman's Statement

The Board of Raven Russia announces the Group's results for the year ended 31 December 2012.

The Group is making very good progress. Lettings have continued in an undersupplied market, finance facility maturities have been extended and important earnings enhancing acquisitions made. It has been a busy and fulfilling year.

Net rental and related income ("NOI") for the year increased by 49% from $91.7 million to $136.5 million. Underlying operating profit increased by 63% from $68.9 million to $112.1 million and underlying earnings before taxation increased significantly from $8.1 million to $34.7 million.

Operating cashflow increased 47.9% from $81.6 million to $120.7 million.

Significant acquisitions added two fully let properties in Moscow to the portfolio, with 259,000 square metres ("sqm") of space, increasing NOI in the period by $15.1 million. They add $31.9 million to our annualised NOI. The acquisitions were partly financed by an issue of 48.4 million preference shares at 134p. Even before taking account of acquisitions, progress has been excellent.

After a revaluation surplus of $69.3 million (2011: $153 million), IFRS operating profit was $148.8 million (2011: $200.3 million). Underlying basic earnings per share increased from 0.18 cents to 5.30 cents. Adjusted, fully diluted net asset value per share increased from 119 cents to 125 cents.

Annualised NOI is $170.1 million today. With pre let agreements ("PLAs") and letters of intent ("LOIs"), including those on additional phases of construction at our Noginsk and Klimovsk projects, this increases to $179.7 million. Fully let, annualised NOI will be $190.4 million.

We have maintained our balance sheet strength at the year end. Following the acquisitions in the year, gearing has increased to 44.1% (2011: 38.1%) as calculated in note 35 to the financial statements. Our year end cash balance stood at $191.7 million (2011: $181.8 million).

Our final distribution of 2.25 pence per share is a 29% increase over the final distribution of 1.75 pence declared last year and means a 25% increase in total distribution for the year from 3 pence to 3.75 pence per share. This represents a yield of 5.7% on the current share price .

As our shares continue to trade at a significant discount to NAV we will be distributing in the form of a tender offer buy-back of 1 in 33 ordinary shares at 75 pence. The tender offer will be subject to the approval of shareholders and a circular setting out full details will be posted shortly. It is expected that the tender offer will be completed in May 2013.

I would like to take this opportunity to thank our shareholders, employees and advisors for their support during a very busy year.

Richard Jewson

Chairman

10 March 2013

Chief Executive's Report

The year to 31 December 2012 has been very active. Alongside continuing lettings we have made some significant acquisitions, continued our construction programme in Moscow, prolonged near term debt maturities and raised further preference share capital.

The same market dynamics we saw in 2011 continued through 2012 and into 2013. The key factors for us have been strong tenant demand and limited new supply.

The portfolio is virtually fully let and rents have reached $135 per sqm in Moscow. New leases are being signed for 5 to 10 year terms with high quality tenants.

Our completed investment portfolio comprises 1.3 million sqm of completed Grade A warehousing. It currently produces NOI of $170.1 million per annum from a group of high quality tenants. PLAs and LOIs increase that to $175.5 million and it will reach $179.5 million when fully let. At the year end, these properties had a gross value of $1,502 million, equating to a fully let yield of 11.9 % and a capital value of $1,155 per sqm.

We are well advanced on the construction of new phases of 48,000 sqm at Klimovsk and 36,000 sqm at Noginsk and expect completion at the end of the second quarter 2013. These already have signed PLAs and LOIs for $4.1 million and will add $10.9 million in total when fully let, increasing the potential annualised NOI from the portfolio to $190.4 million.

During the year, we acquired assets at Pushkino and Sholokhovo in Moscow. Grade A warehouses, fully let to strong tenants with current initial yields of 11.8% and 12.1% respectively. After deducting the cost of bank interest and preference dividends which financed the acquisitions, they contribute $11 million to profits on an annualised basis. They contributed $15.1 million to NOI in the second half of 2012.

We also acquired 38 hectares of land at Padikova on the Nova Riga highway to the north west of Moscow. Over time, we can build 197,000 sqm there.

In addition to the projects and land above, we have sufficient permitted Moscow land to add at least another 150,000 sqm to the portfolio in due course

A potential annualised rent roll of $190.4 million will give a strong income base for a growing distribution per share. This remains our main financial objective. If we can demonstrate a clear record of growing distributions going forward, that will go a long way to demonstrating the real value of our assets.

A big question for us is how much to accelerate development beyond our existing organic plan of 50,000 to 100,000 sqm per annum. The direct property market would suggest aggressive expansion but we don't want to jeopardize our now solid investment income foundation and we want to grow distributions per share. The main constraint is funding.

I will also take this opportunity to reiterate our policy on tender offer buy backs, repeating what I said at the half year. We are committed to tender offer buy-backs whilst this can be achieved at discounts to NAV. In the medium to long-term this will add value to shareholders. A shareholder tendering shares will receive cash equivalent to the quantum of a dividend and, assuming the tender offer is fully taken up, will retain the same percentage shareholding. Even though the number of shares held reduces, the percentage holding of the shareholder remains the same and NAV per share will rise as shares are cancelled at a discount to NAV.

The perception of Russia is that it is high risk and volatile. It is our job to demonstrate it is not. We hope to do this by producing steadily increasing distributions to shareholders

Glyn Hirsch

Chief Executive Officer

10 March 2013

Property Review

2012 was a year of development, acquisition and letting across the portfolio. All of these activities contributing to either an immediate increase in income or to the future potential income of the portfolio, through asset management and development.

Tenant demand in 2012 was once again strong, in the regions as well as Moscow and as a result, we completed 124,000 sqm (1.3 million square feet) of new lettings, generating an additional $16.4 million of annualised rental income and allowing full operating cost recovery on the space. With the maturity of our portfolio, we are now becoming an active asset manager and in the year we regeared or renewed leases on 192,000 sqm with an annual rental uplift of $3.6 million.

In late 2011 we identified a potential structural under supply in the Moscow warehouse market and we focussed on increasing our exposure there. Taking advantage of strong tenant demand and what we perceived as a pricing anomaly on a number of assets offered for sale, we acquired two further Moscow properties, Pushkino and Sholokhovo, comprising a total of 259,000 sqm, for $268.6 million.

Our portfolio in Moscow now totals 883,000 sqm, representing 69% of our properties. This will increase to 967,000 sqm during 2013 with the completion of the new phases at Noginsk and Klimovsk.

The new acquisitions at Pushkino and Sholokhovo produce $31.9 million of annualised NOI. We believe Pushkino is particularly under rented with an average warehouse rent of only $122 per sqm compared to market rents of around $135 in Moscow.

The acquisition of the Padikovo land on the Nova Riga highway to the north west of Moscow for $23 million will, subject to receipt of the appropriate consents and development finance, potentially add another 197,000 sqm to our Moscow holdings over the next few years. We expect to be in a position to start on site in the second quarter of 2013, once detailed planning consent is received. It is our current intention to build, subject to funding, two phases of around 100,000 sqm each for delivery in 2014 and 2015.

Our investment properties were valued by Jones Lang LaSalle ("JLL") at the period end, in accordance with the RICS Valuation and Appraisal guidelines, and are carried at an aggregate gross value of $1.5 billion. This resulted in an increase of $72.9 million in portfolio value, reflecting our progress in leasing and asset management. This year end valuation reflects an average yield of 11.9% on a fully let portfolio NOI of $179.5 million (not including phases under construction).

Investment Portfolio

In Moscow, excluding the space under construction at Noginsk and Klimovsk, we have eight completed projects totalling 883,000 sqm, producing an annualised income of $120.3 million at the year end. These properties are virtually fully let. During the year we let 55,000 sqm in Moscow increasing our income by $8.5 million per annum. Rents have remained around $130-$135 per sqm for Grade A warehousing throughout the year.

At Krekshino, we took the opportunity of a lease expiry to regear all of NLC/Itella's leases, extending the term until 2019 and increasing the rent by circa 25%, contributing to uplift in value of 6%.

At Noginsk we are on site building 36,000 sqm for delivery in the second quarter of 2013. We expect this project to deliver a marginal yield on cost of 15.9%. We are currently in discussion with a number of tenants. At Klimovsk we aim to deliver 48,000 sqm by the second quarter of 2013. We have already signed one PLA for 18,000 sqm and an LOI for 10,000 sqm, and we have interest in the remaining space. This project will produce a marginal yield on cost of 16.4% on current estimates.

In St Petersburg, the market has improved and we leased 44,700 sqm to third parties during the year and our operating subsidiary, Roslogistics, increased its space by a further 15,000 sqm to meet new client demand. We now have only 14,500 sqm of vacant space available, 6,000 sqm of which is subject to LOIs and we expect the remainder to let in the first half of 2013. Rents have improved and now stand at $115-$120 per sqm.

Our project in Rostov is now 100% let. We are seeking prelets and development finance to allow us to start an additional 15,000 sqm of development on the Phase 2 land we own.

In Novosibirsk we let 18,600 sqm during the year although net absorption was only 2,400 sqm as a result of lease expiries and reduction in Roslogistics space. During the last three years we have let an average of 20,650 sqm per annum. With only 40,000 sqm vacant today and LOIs signed on 18,000 sqm of that space, we anticipate being fully let in the next 12 months.

Land Bank

We have started work on 84,000 sqm of our land bank at Klimovsk and Noginsk. Subject to detailed planning and finance we will start on site at Padikovo, Nova Riga in the second quarter of 2013, with the aim of delivering around 100,000 sqm by the middle of 2014.

At Noginsk we still hold another 32 ha on which we can build over 150,000 sqm in the future.

We have received a number of approaches from prospective tenants to develop out elements of our regional land bank over the year. Unfortunately the attractions of developing in Moscow, where tenant demand is more predictable and valuations stronger, mean these potential projects elsewhere would deliver less attractive returns. With this in mind, we have reviewed the carrying value of our regional land bank. As it has become unlikely that we will start any development in Belarus or on those sites held on short term development leaseholds, we have written down the carrying value of these properties by $15.7 million.

The Market

Tenant demand is still driving the market and JLL estimate that take up in 2012 was 1.3 million sqm in Moscow alone. The vacancy rate for class A warehouse stood at 0.65% at the year end. In St Petersburg the vacancy rate has fallen to 2.2%.

For 2013 JLL forecast new supply of Grade A warehouse space in Moscow of circa 1 million sqm with potential demand ahead of that at 1.2 million sqm. The key trend in the market is the increase in build to suit for sale deals which accounted for 26% of total take up in 2012; in 2013 this is expected to rise to 33% by JLL. Internet retail demand accounted for 13% of take up in 2012.

These statistics suggest we are operating in one of the only places in Europe where retailers are posting double digit sales growth and this is driving continued demand for warehousing and distribution space. We are positive about the market and the portfolio looks increasingly reversionary.

The combination of rental growth, further development and opportunities for active portfolio management give us confidence for the future.

Financial Review

This set of financial results benefits from a full year of high occupancy in the existing portfolio, the introduction of the second phase at Klimovsk and six months of the acquisitions at Pushkino and Sholokhovo.

Income

Net rental and related income increased from $91.7 million to $136.5 million in the 12 months to 31 December 2012.

Our core investment portfolio generated $130.8 million of NOI (2011: $80.9 million) from third party tenants, the completion of the second phase at Klimovsk at the beginning of the year adding $7.2 million and a further $15.1 million from acquisitions.

The cost of servicing vacant space reduced from $13.7 million to $9.0 million.

Roslogistics continues to improve efficiency and profitability. It now operates out of 86,000 sqm of our portfolio after increasing its presence in St Petersburg and reducing in Novosibirsk. The business contributed $13.4 million (2011: $10.7 million) to NOI and $10.2 million to Group profit before tax in the year (2011: $6 million).

Raven Mount continues to be a mixed bag. The joint venture at the Lakes is performing well but the residential stock that remains in the UK is slow to move. Total gross sales in the year were $23.4 million (2011: $13.9 million) on stock of $21.0 million (2011: $14.0 million). However, as explained in our half year results, we have also written down our UK residential stock by $9.4 million to accelerate sales and cash generation. We now have $13.8 million of completed UK residential stock (2011: $30.6 million) remaining on balance sheet.

Overheads

Overheads supporting the core investment portfolio were $15.3 million (2011: $12.8 million).Central overheads were $8.5 million (2011: $6.1 million) and Raven Mount and Roslogistics had overheads of $2.5 million (2011: $3.0 million) and $3.2 million (2011: $3.0 million) respectively. The higher overheads reflect an increase in cash bonuses paid in the year and a small step up in costs to support the construction programme.

With the introduction of the new, long term incentive scheme for executives and senior management during the year (note 32 to the financial statements) we are required to estimate the total charge to the income statement over the 3 year period of the scheme. This has resulted in a charge to the income statement of $12.2 million in the current year, which is then immediately reversed through reserves. In the coming two years any additional charge or credit will reflect any change in actual awards made or change in estimated charge. The charge for actual shares vesting in the year was $4.4 million (2011: $6.1 million) which is again reversed through reserves. The impact on NAV per share calculation is limited to the release or potential release of shares from treasury to satisfy any share allocation.

Earnings

Our key earnings measurement is "Underlying Earnings" as defined in note 9 to the financial statements. This shows the earnings derived from our operations before capital items, including mark to market valuations and best shows the ability of operations to produce covered dividends. Our underlying earnings before tax increased significantly in the year, from $8.1 million to $34.7 million giving basic underlying earnings per share of 5.30 cents (2011: 0.18 cents).

Financing

The Group's financing structure has adapted in the year to incorporate the acquisitions made and the construction programme being undertaken, introducing new preference shares and funding facilities.

To fund the equity for the acquisitions of the asset owning subsidiaries at Sholokhovo and Pushkino, we issued an additional tranche of 48.4 million of preference shares in June 2012 at an issue price of 134p.

A new facility of $129 million, secured on the Pushkino Logistics Park was drawn in June on a five year term at a margin cost to the Group of 5.85% over a five year swap of 1.08%.

The Sholokhovo subsidiary was purchased with an existing fully drawn debt facility of $21 million, a remaining term of nine years and a margin of 6.45% over US LIBOR.

The Group's construction programme is being funded by a mixture of construction finance and refinancing of completed projects.

An unsecured construction loan of $30 million was drawn from Deutsche Investitions-Und EntwicklungsgesellschaftMBH(DEG) Bank. The facility has an eight year term and a 7.9% margin over US LIBOR.

US$44 million has been drawn from a $47.5 million facility secured upon the second phase of the Klimovsk project. This facility has a margin of 7% over US LIBOR and a 10 year term. The remaining undrawn balance is available until 24 April 2013.

A further $38 million was drawn under the facility secured on the Shushari project in St Petersburg.

Near term maturities of existing facilities have been or are in the process of being extended.

In November, the Group agreed a two year extension to the $41 million loan facility secured on the Constanta office property at a cost to the Group of 6.0% over US LIBOR.

Since the year end the Group has entered into a $100 million facility agreement to refinance the existing $78 million loan secured on the Krekshino logistics park. Completion of the remaining conditions precedent is expected in the second quarter of this year and the existing loan has been extended until 30 June 2013 to allow completion.

Finally, the Group repaid in full the debt facilities secured on the Southern project, the Group facility provided by Royal Bank of Scotland International and the Barclays Bank facility secured on the Group's UK inventory. Repayments under these facilities totalled $24.6 million.

Together with the hedging arrangements described below, this leaves the Group with 194 million preference shares at an annual cost of 12% and $776 million of senior debt at a total weighted average cost of debt to the Group of 7.3% (2011: 7.1%).

At 31 December 2012 the Group had undrawn loan facilities available of $3.5 million (2011: $38 million).

Hedging

The Group has entered into hedging arrangements in respect of its interest rate exposure. $422 million (2011: $335 million) of Group bank borrowings have been fixed with three years remaining (2011: 3 years) at a weighted average swap rate of 1.86% (2011: 2.38%) and $225 million (2011: $186 million) capped at 1.93% (2011: 2.69%) for 3 years (2011: 4 years).

The principal foreign exchange risk to the Group relates to the funding of the preference share coupon in Sterling. This risk has been capped for the three years to 18 December 2015 at a USD/GPB exchange rate of 1.60.

We will be looking to extend our interest hedging for the most recent financing facilities drawn and continue a three year rolling hedge on our sterling exposure on the preference share coupon.

Balance Sheet

The balance sheet reflects the impact of the acquisitions made in the year, assets boosted by the inclusion of the new properties and liabilities by the related debt facilities and preference share issue. Debtors and creditors also reflect the on-going litigation in Toros, the company which owns the Pushkino project, the defence of which is being conducted by the previous owner and for which we have been indemnified. Details of this case and the indemnity were given in the shareholder circular issued on 1 May 2012 and the claim is for Roubles 827.4 million plus interest.

Cashflow

Operating cash flows track our portfolio letting success. These have increased from $33 million in 2010, to $82 million in 2011 and to $121 million in the year to 31 December 2012. The larger investing and financing cash flows relate to the acquisitions in the year. Distributions to ordinary and preference shareholders increased to $63 million (2011: $51 million).

Taxation

The majority of the tax charge for the year of $33.4 million (2011: $40.6 million) relates to deferred tax movements. $20.9 million (2011: $35.3 million) is the deferred tax liability on property revaluations and depreciation and $12.3 million (2011: nil) is the reduction in deferred tax assets due to unrealised foreign exchange movements in our Russian subsidiaries. The actual tax paid in the year totalled $3.5 million (2011: $2.7 million).

Net Asset Value and Distributions

Net assets increase to $689.0 million (2011: $668.8 million) following a revaluation surplus of $46.1 million (2011: $129.6 million) after deferred tax and after an impairment of Russian regional land bank and residential UK stock of $26 million. We distributed the equivalent of 1.5p per share by way of a tender offer buy back in the year and intend to distribute a further 2.25p in the same manner as a final distribution.

Mark Sinclair

Chief Financial officer

10 March 2013

Raven Russia Limited - Directors

Richard Jewson (aged 68)

Non-executive Chairman

Richard Jewson joined Jewson, the timber and building merchant, in 1965 becoming the Managing Director, then Chairman of its holding group, Meyer International plc from which he retired in 1993. Since then he has served as non-executive director and chairman of a number of public companies. He retired in 2004 from 10 years as Chairman of Savills plc and in 2005 from 14 years as a non-executive Director and deputy Chairman of Anglian Water plc. He is currently Chairman of Archant Ltd, and a non-executive director of Temple Bar Investment Trust plc, Grafton Group plc and other unquoted companies.

He is Chairman of the Nominations Committee and a member of the Remuneration Committee.

Anton Bilton (aged 48)

Executive Deputy Chairman

Anton Bilton is an economics graduate from The City University in London. Anton was the founder of The Raven Group. He has also been a founder and director of three other companies that have floated on AIM.

He is a member of the Nominations Committee.

Glyn Hirsch (aged 51)

Chief Executive Officer

Glyn Hirsch, a Guernsey resident, qualified as a Chartered Accountant with Peat, Marwick Mitchell & Co in 1985. Until 1995, he worked in the corporate finance department of UBS (formerly Phillips & Drew) latterly as an Executive Director specialising in UK smaller companies. From 1995 until 2001, he was Chief Executive of CLS Holdings plc, the listed property investment company, a former Director of Citadel Holdings plc, the specialist French property investor and former Chairman of Property Fund Management plc, the listed property fund management business. Glyn is also a non-executive director of Lion Trust Asset Management plc.

Mark Sinclair (aged 47)

Chief Financial Officer

Mark Sinclair, a Guernsey resident, is a chartered accountant, and spent 18 years at BDOStoy Hayward, a leading professional services firm in the UK. He was a partner in the London real estate group responsible for a portfolio of large property companies, both listed and private. He joined Raven Mount in June 2006 as Finance Director of Raven Russia Property Management Ltd, the former Property Adviser to the Company and joined the Board of Raven Russia in March 2009.

Colin Smith (aged 43)

Chief Operating Officer

Colin Smith, a Guernsey resident, qualified as a Chartered Accountant with Stoy Hayward. Prior to joining the company, he was a director in the audit and assurance division of the chartered accountant practice of BDO in Guernsey, having joined BDO in 1994. Colin has also been a non-executive director of a number of offshore investment funds and companies.

Christopher Sherwell (aged 65)

Senior Independent Non-executive Director

Christopher Sherwell is a Guernsey resident and a former managing director of Schroders in the Channel Islands. Before joining Schroders, he was Far East Regional Strategist in London and Hong Kong for Smith New Court Securities and prior to that spent 15 years as a journalist much of them as a foreign correspondent for the Financial Times. He has considerable public company experience and acts as a non executive director on a number of publicly listed investment companies including Baker Steel Resources Trust Ltd and the Prospect Japan Fund Ltd.

He is Chairman of the Remuneration Committee and a member of the Audit and Nominations Committees.

Stephen Coe (aged 47)

Non-executive Director

Stephen Coe BSc, FCA, a resident of Guernsey, is self employed providing executive and non-executive services to public and private clients. His current public directorships include European Real Estate Investment Trust Ltd, Kolar Gold Ltd and Trinity Capital Ltd where he acts as a non-executive director and chairman of the audit committee and Black Sea Property Fund Ltd where he acts as a non-executive director. Private clients include investment funds and a captive insurer. From 2003 to 2006, he was Managing Director of Investec Trust (Guernsey) Ltd and Investec Administration Services Ltd, responsible for private client and institutional structures. Between 1997 and 2003 he was a director of Bachmann Trust Company Ltd and previously he worked with Price Waterhouse specialising in financial services.

He is Chairman of the Audit Committee and a member of the Remuneration Committee.

David Moore (aged 52)

Non-executive Director

David Moore is a resident of Guernsey. He is an advocate of the Royal Court of Guernsey and a consultant at Bedell Group in Guernsey. He is a former partner of Guernsey law firm MourantOzannes where he had practiced since 1993 and before that spent 10 years practising in the City of London, predominantly with Ashurst Morris Crisp. He specialises in corporate and financial matters and is a non-executive director of a number of investment and insurance management companies, investment and insurance companies including Standard Life Investments Property Income Trust Ltd of which he is non-executive chairman.

He is a member of the Audit and Remuneration Committees.

Directors' Report

The Directors present their report and the audited financial statements of the Group for the year ended 31 December 2012.

Principal activity

The Company is a Guernsey registered company and during the year carried on business as a property investment company.

Business review

A review of the business during the year is contained in the Chairman's Statement, Chief Executive's Report, Property Review and Financial Review.

Results and dividends

The results for the year are set out in the attached financial statements.

The Company undertook a tender offer as an interim distribution for 1 in every 49 shares at 75p, equivalent to a dividend of 1.5p per share (2011: Tender offer 1 share in every 46 at 58p). A final distribution of 2.25p by way of a tender offer of 1 share in every 33 at 75p is being proposed at the Annual General Meeting (2011: Tender offer 1 share in every 40 at 70p).

Directors

The Directors, who served throughout the year, were as follows:

Richard Jewson (Non-executive Chairman)

Anton Bilton (Executive Deputy Chairman)

Glyn Hirsch (Chief Executive Officer)

Mark Sinclair (Chief Financial Officer)

Colin Smith (Chief Operating Officer)

Christopher Sherwell (Senior Independent Non-executive Director)

Stephen Coe (Independent Non-executive Director)

David Moore (Independent Non-executive Director)

Following the provisions of the UK Corporate Governance Code applicable to larger companies, all the Directors shall be subject to annual re-appointment by Shareholders at the Annual General Meetings of the Company.

Details of the Directors' remuneration and shareholdings are included within the Remuneration Report.

Substantial shareholdings

The Company has been notified of shareholders, other than directors, holding 3% or more of the ordinary shares as follows:

Ordinary Shares of £0.01

Auditors

Ernst & Young LLP have expressed their willingness to continue in office and a resolution to re-appoint them will be proposed at the forthcoming Annual General Meeting.

Going Concern

The financial position of the Group, its cash flows, liquidity position and borrowings are described in the Financial Review and the notes to the accompanying financial statements. In addition, in note 35 there is a description of the Group's objectives and policies for managing its capital, its financial instruments and hedging activities and its exposure to credit and liquidity risk.

During the year the Group had and continues to hold substantial cash and short term deposits. These were supplemented by the increasing and profitable rental income streams of the operating activities of the Group, along with the acquisitions of two fully let income producing assets within the year. The Group extended the average time to maturity of its banking facilities to beyond four years. It also issued new preference shares to the value of £64.9 million in the year.

After making appropriate enquiries and examining sensitivities that could give rise to significant financial exposure, the Board has a reasonable expectation that the Company and the Group have adequate resources to continue operations for the foreseeable future. Accordingly, the Group continues to adopt the going concern basis in preparation of these financial statements.

Directors' responsibilities

Guernsey company law requires the Directors to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the Group at the end of the year and of the profit or loss of the Group for that period. In preparing those financial statements, the Directors are required to:

·; Select suitable accounting policies and then apply them consistently;

·; Make judgements and estimates that are reasonable and prudent;

·; State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

·; Prepare the financial statements on the going concern basis unless it is inappropriate to assume that the Group will continue in business.

The Directors confirm that they have complied with the above requirements in preparing the financial statements.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and to enable them to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008 and IFRS as adopted by the EU. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

So far as each of the Directors is aware, there is no relevant audit information of which the Company's auditor is unaware and each has taken all the steps he ought to have taken as a Director to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Directors Responsibility Statement

The Board confirms to the best of its knowledge:

The financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company and the undertakings included in the consolidation taken as a whole; and

The management report, which is incorporated into the Directors' Report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

This responsibility statement was approved by the Board of Directors on 10 March 2013 and is signed on its behalf by:

Mark Sinclair Colin Smith

Chief Financial Officer Chief Operating Officer

Corporate Governance

Chairman's foreword

This year has seen the continued development of the Group into a mature property investment business. As explained earlier, the acquisition of two income producing assets increased our portfolio's leasable area by 25%, we progress our construction programme, organically growing our portfolio by 50-100,000sqm each year (4-8% of the current portfolio by size). Along with developments in UK Corporate Governance this has meant a busy year for your Board and its committees. We remain committed to the highest standards of governance and this report sets out our approach.

Richard Jewson - 10 March 2013

The Financial Services Authority's listing rules require the Company to explain how it has applied the Main Principles of Section 1 of the UK Corporate Governance Code (the "Code"). This report, together with the Directors' and Remuneration Reports, set out how the Company has done so. For the financial year ended 31 December 2012, the Company has been regarded as a 'smaller company' for the purposes of the Code. In the opinion of the Board, the Company has complied fully with the Main and Supporting Principles of the Code throughout the financial year. Copies of the Code can be obtained free of charge from the Financial Reporting Council's website (www.frc.org.uk).

The Role of the Board

The Board is responsible for the governance processes within the Group whilst monitoring the performance of the Executives to whom it delegates management responsibility for the Group. The Board has approved a formal schedule of matters reserved solely for its consideration as outlined below and updates this schedule as necessary. Matters reserved for the board include:

·; Development of strategy;

·; Capital structure and dividend policy;

·; Financial reporting, including approval of results;

·; Internal control and risk management;

·; Corporate governance; and

·; Material transactions.

The Board has delegated a number of its responsibilities through its Audit, Remuneration and Nominations Committees. Terms of reference for each of these committees are reviewed periodically by the Board, and are made available on the Company's website, www.ravenrussia.com. An outline of each of the Committees' functions and responsibilities is set out below.

Board composition

During the year, the board comprised eight Directors: Non-Executive Chairman, Richard Jewson; four Executive Directors; and three Non-Executive Directors. The Board considers all of the Non-Executive Directors to be independent for the purposes of the Code as further explained below. The Board consider the Chairman to be independent. The balance of skills and expertise of the Board ensures that no individual or group of individuals dominate the Board's decision making, allowing for independent challenge and rigour to the Board's deliberations. The roles of the individual Directors are explained further below.

There is a defined division of the responsibilities between the Chairman and Chief Executive. The Chairman is primarily responsible for the effective working of the Board and the Chief Executive for the operational management of the business. This includes development of the Group strategy and business model, the presentation of this to the Board and ultimately its implementation across the Group. Terms of reference delineating a clear division of responsibilities are in place and are reviewed on a regular basis.

Christopher Sherwell is the Senior Independent Director of the Company.

David Moore is a consultant for the Bedell Group in Guernsey and is a former partner of MourantOzannes, Advocates and Notaries Public. The Group has used MourantOzannes for legal engagements and Notary services but to avoid any possible conflict of interest or challenge to the independence of Mr Moore, the Group ceased using MourantOzannes other than for notary services. The Group did not incur any fees due to MourantOzannes for the year ended 31 December 2012. The Board considers Mr Moore to be independent for the purposes of the Code.

Biographies for each director are included elsewhere in this Annual Report.

The full Board meets at least six times a year to consider general matters affecting the Company and otherwise as required. Committee meetings comprising any two or more Directors meet on an ad hoc basis to consider transactional and related matters concerning the Company's business. During 2012, there were 26 such committee meetings. Meetings are generally held in Guernsey at the head office, however at least once a year the Board will hold a meeting in Russia to review the Group's operations and meet local management.

To enable the Board to discharge its duties, all Directors receive appropriate and timely information, including briefing papers distributed in advance of any board meeting and regular management information. All the Directors are entitled to have access to independent professional advice at the Company's expense where they deem it necessary to discharge their responsibilities as Directors. On appointment, a Director receives advice from the Company's financial and other professional advisers as to the affairs of the Company and their responsibilities, an estimation of time commitments necessary to undertake the role and a commitment to receive other such training as may be appropriate.

Attendance at Board or Committee meetings during the year to 31 December 2012

(where 'N/A' is shown, the Director listed is not a member of the Committee)

1 - David Moore joined the Remuneration Committee on 20 November 2012. The Remuneration Committee did not meet between 20 November 2012 and 31 December 2012.

Board performance evaluation

The Board undertakes annual performance evaluations of its own and its Committees' activities. These are led by the Chairman and where dealing with his own performance, by the Senior Independent Director.

The performance evaluations during 2012 were facilitated by the Institute of Directors and took the form of a questionnaire and production of a report. The findings of the report were discussed in detail by the Board and it was concluded that the performance of the Board, its Committees and individual Directors were effective and the Board had the necessary balance of skills and expertise required to direct the business.

The Board and Nominations Committee annually consider the composition of the Board and its Committees with reference to the Group's needs and also the requirements of the Code. In accordance with the Code, all Directors will be put forward for re-election each year at the Annual General Meeting. Having considered the balance of skills, expertise and performance of the Board, its committees and individual Directors, the Board recommends each of the Directors for re-appointment at the Annual General Meeting.

Board Committees

The Board has established Audit, Remuneration and Nominations Committees. These Committees undertake specific activities through delegated authority from the Board. Terms of reference for each Committee have been agreed and are reviewed on a regular basis by the Board. The terms of reference for each Committee can be obtained from the Company's website.

Audit Committee

The Audit Committee comprises David Moore, Christopher Sherwell and Stephen Coe, (Chairman), who is considered to have recent and relevant financial experience. The Committee meets at least twice a year. There are a number of regular attendees at meetings of the Audit Committee, including other members of the Board, senior management and the Group's external auditors. The Chairman of the Committee also meets with external auditors without management present.

The Committee is responsible for ensuring that the financial performance of the Group is properly reported and monitored. The Committee reviews the annual and interim accounts, the accounting policies of the Group and key areas of accounting judgement, management information statements, financial announcements, internal control systems, risk management, and the continuing appointment of the auditors. It also monitors whistle blowing policy and procedures over fraud and bribery.

Due to its size, structure and the nature of its activities, the Group does not have an internal audit function. During the year, the Audit Committee again considered the need for an internal audit function, whether a bespoke function facilitated by internal resources, or using an outsourced model with the assistance of the Group's advisors. The Committee concluded that there was no need for a separate internal audit function at this time but would continue to keep this matter under review.

During the year, the Committee has considered the appointment, compensation, performance and independence of the Group's auditor, Ernst & Young LLP.

Ernst & Young LLP may also provide non-audit services to the Group where they are determined to be best placed to provide the particular service and there is a commercial advantage to the Group in Ernst & Young LLP providing the service. The non-audit services provided are typically assurance related services, tax advisory or transaction advisory services. The policy for the provision of non-audit services is reviewed and confirmed by the Committee annually. As shown in note 6(b) to the financial statements, total fees payable to Ernst & Young LLP in the year to 31 December 2012 amounted to $2 million, of which $866,000 was for non-audit services. This included $705,000 for transactional advisory services in connection with the acquisitions and preference share placing where it was considered that the provision of these services by Ernst & Young LLP provided the Group with a commercial advantage.

Ernst & Young LLP has provided the Committee with written confirmation of their independence. The Committee has recommended a resolution for their re-appointment to be proposed to shareholders at the Annual General Meeting.

Nominations Committee

The Nominations Committee comprises Anton Bilton, Christopher Sherwell and Richard Jewson, who is Chairman. The Committee undertakes an annual review of any succession planning and ensures that the membership and composition of the Board and its Committees are constituted appropriately in light of the requirements of the Group and those of the Code, with the necessary balance of skills and expertise to undertake their roles effectively.

Should the Committee consider it necessary to either refresh or enlarge the Board or its Committees, acting in accordance with its terms of reference, a rigorous and thorough evaluation will be undertaken by the Committee in assessing the requirements of the Group so that the individual or individuals appointed will add value to the on going activities of the business.

Remuneration Committee

The Remuneration Committee comprises Stephen Coe, Richard Jewson, David Moore and Christopher Sherwell, who is Chairman. The Remuneration Committee meet at least once a year to review the performance of Executive Directors and to recommend their remuneration and other benefit packages. The fees of the Non-Executive Directors are determined by the Executive Directors. Full details of the activities undertaken by the Committee during the year are included within the Remuneration Report. This Report will be subject to an advisory vote at the Annual General Meeting.

Internal Control and Risk Management

The Board has overall responsibility for the systems of internal control and for reviewing their effectiveness throughout the Group. This is an on going process, in accordance with the guidance of the Turnbull Committee on internal controls, that identifies, evaluates and manages the principal risks and uncertainties that may affect the achievement of the Group's strategic objectives. Such a system is designed to manage or reduce the effects of the possible risks to which the Group's activities are subject, rather than providing absolute assurance against material misstatement or loss.

Consideration of risks and risk management form an integral part of the Board deliberations and are key to its decision making processes. There are risks which your Board have no control over. These are mainly overriding external risks such as the wider economic environment, however the impact of such risks and effect that they have on the Group are considered and mitigated to the extent possible. The strategic decisions of the Group are adjusted to address these issues ensuring that threats are reduced and opportunities are exploited.

Key features of the risk management process in place during the year and up to the date of the annual report and financial statements include:

·; A comprehensive system of reporting and business planning;

·; A defined schedule of matters reserved for the Board;

·; An organisational structure chart with clearly defined levels of authority and division of responsibilities;

·; Formal documented policies and procedures throughout the Group;

·; The close involvement of the Executive Directors and senior management in all aspects of the day-to-day operations, including regular meetings to review all operational aspects of the business and risk management systems;

·; The Board's review of Group strategy and progress against objectives throughout the year;

·; A formal whistle blowing policy;

·; A comprehensive and robust system of financial reporting which includes regular management information, such as budgets, re-forecasts, cash flows, treasury reporting and management accounts; and

·; A regular assessment of risks within the business at all operational levels.

The Audit Committee has reviewed the effectiveness of the systems of internal control and has reported its findings to the Board throughout the year and up to the date of the annual report and financial statements. The Risk Committee (as further defined below) report regularly to the Audit Committee on its deliberations and findings. The risks and uncertainties to which the Group is subject are reviewed and considered by the Audit Committee and the Board at regular intervals, particularly with reference to the strategic objectives of the business.

The Audit Committee has established a Risk Committee to carry out the review and assessment of risks associated with the business. This Committee comprises Executive Directors and senior management involved in each operating jurisdiction and department of the Group. This engenders a culture of risk assessment within the Group and reinforces the strategic objectives communicated by the Board. During the year ended 2012, the Risk Committees met four times.

Corporate responsibility

Corporate responsibility covers many different aspects of business but our primary focus is on the environmental impact of our activities and properties and the social impact in the jurisdictions in which the Group operate. It is the responsibility of the Company's Board of directors to manage the environmental, economic and social impact of the Group's business strategy.

The Board recognises that the way its investment properties are designed, built, managed and occupied can significantly influence their impact on the environment and the community in which they are located and it seeks to manage these issues. Your Board notes that from 2013 the London Stock Exchange will require Main Market listed businesses to report on levels of greenhouse gas emissions and the Group will work with its advisers to collate the necessary data to report in its 2013 Annual Report and Accounts.

Your Board also recognises the social impact of its operations in each of its key jurisdictions, Russia, Guernsey and Cyprus. In Russia, this is particularly evident in the employment opportunities that are created in the communities where the Group's properties are located but in each jurisdiction staff are encouraged to participate in community activities and the Board has established a fund to support local causes or charities, which meet the corporate values of the Group.

Investor relations

The Chief Executive, Executive Deputy Chairman and Chief Financial Officer are the Company's points of contact for investors, fund managers, analysts, the press and other interested parties. The Company's investor relations programme includes formal presentations of the annual and interim results, as well and regular analyst briefings and meetings.

The Board receives updates on the Company's investor relations activities including any reports prepared by the Company's brokers, external analyst papers, and details of any shareholder meetings.

The Board believes that sustainable financial performance and delivering on the objectives of the Company are key measures in building trust with the Company's shareholders. To promote a clear understanding of the Company, its objectives and financial results, the Board ensures that information relating to the Company is disclosed in a timely manner and in a format suitable to the shareholders of the Company. The Company's website has been developed to facilitate communication with all shareholders. Communication through these means allow our investors to receive information in a timely and cost effective manner.

The notice of AGM accompanies this report and a separate proxy card is provided for shareholders.

Signed for and on behalf of the Board

Colin Smith

Director

10 March 2013

Risk Report

The Board places significant importance on identifying and managing the risks facing the business. These encompass the risks, real and perceived, of operating in a foreign market such as Russia, to the more obvious cyclical, property specific risks, presented by the development and investment in a large property portfolio.

In the last eight years we have addressed the fundamental risks of entry into any new market, identifying experienced and trustworthy local joint venture partners in the early stages and gradually building up our own domestic presence. We are now the largest player in our niche and have all of the in house skills required to manage both local regulatory and generic property risks. Our in house expertise includes legal, finance and accounting, leasing, asset management and construction departments. We believe that we have the structure and culture in place to identify and effectively manage the risks that our market and sector presents.

Our primary focus is on obtaining attractive returns for our shareholders and as such, we have a commensurate focus on financial risks. Set out below is an overview of how we manage our key financial risks.

Financial Risks

Our strategy from the outset has been simple: to build an investment portfolio in the Russian warehouse sector which allows us to generate a dollar denominated, ungeared yield on cost of 12%. We believed that this would translate into very attractive dividend yields for our shareholders.

Gearing

Gearing has enabled us to accelerate our growth but we have managed the increased risk to the Group by raising asset secured facilities, ring-fenced in special purpose vehicle structures. We have not taken any significant bank debt exposure onto the holding company balance sheet to date. This allows us to monitor both our debt service obligations at an asset level but maintain low gearing ratios at a consolidated level. Our Group gearing levels, not including preference shares, have been managed between 35% and 46%. This held us in good stead during a busy speculative construction period in 2008 and 2009 and through the recent financial crises.

The changing banking landscape and the diminishing number of players in the market, combined with our maturing portfolio, may mean that we do look to alternative financing structures in the future. We have demonstrated this already with the issue of preference shares and we may, in time, change our financing risk profile to a more central financing structure, using the portfolio as a whole, to reduce our effective cost of debt.

Key Performance Indicators

With the impact of gearing and our preference shares on results, we place emphasis on our "Underlying Earnings" (as defined in note 9 to the financial statements) and operating cash flows after financing costs. These measures give the most relevant and comparable information on the operating performance of our portfolio and our ability to pay dividends from those operations.

We also monitor our loan to value covenants and the impact of valuations on our diluted net asset value per share. However, given that valuation yields in our market remain significantly above other comparable European markets (close to replacement cost) and result in high cash cover on debt service, we do not currently see this as a key metric on our performance.

Property Acquisition and Development

The market in which we operate has been and continues to be undersupplied. This means that we have had to construct the majority of our portfolio speculatively, 2008 and 2009 being the periods of greatest construction activity. The global downturn, resulted in this new space taking time to let with the cost of vacant space being carried by the Group. We have now reached letting levels that reduce this cost to de minimis levels.

New development in today's market has the potential to deliver high income yields, especially on additional phases of existing assets. We have commenced a speculative construction programme limited to a maximum of 100,000 sqm in any year. This allows us to manage the construction and letting risk on new space in the context of our existing portfolio of 1.3 million sqm.

The market has also presented acquisition opportunities in the last year, of completed, fully let properties. We have completed two acquisitions in the year at prices that allow us to maintain our yield on cost target but also give the opportunity to enhance this through asset management.

Acquisitions present their own risks in our market as we have not been involved in the historic construction and management of the sites. Whilst this adds to the potential for enhanced asset management returns it also introduces the risk of legacy contracts that may need to be managed out. This is all part of the integration risk of introducing new assets to the portfolio.

In the context of the narrative above, we have set out in the following table the principal risks and uncertainties that face our business, our view on how those risks have changed during the year and a description of how we mitigate or manage those risks.

Financial Risk

Property Investment

Property Development

Russian Domestic Risk

Other Operational Risks

The majority of these risks have remained the same over the year. The most significant change has arisen following the acquisitions made in the year and the integration of those assets into the portfolio, including dealing with legacy contract issues.