RESULTS FOR THE NINE MONTHS TO 30 SEPTEMBER 2014

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION

IN OR INTO THE RUSSIAN FEDERATION, THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN

18 November 2014

AFI DEVELOPMENT PLC

("AFI DEVELOPMENT" OR "THE COMPANY")

RESULTS FOR THE NINE MONTHS TO 30 SEPTEMBER 2014

CONTINUED GROWTH IN RENTAL INCOME

AFI Development, a leading real estate company focused on developing property in Russia, has today announced its financial results for the nine month period ended 30 September 2014.

Nine months 2014 financial highlights

· Revenues for the nine months to 30 September 2014, including proceeds from the sale of trading properties, amounted to US$111.5 million

- Rental income, including the income from hotels operations, increased 4% year-on-year to US$109.8 million (compared to US$105.1 million for the 9 months to 30 September 2013)

- AFIMALL City contribution at US$82.7 million (compared to US$74.5 million in the first nine months of 2013)

· Gross profit for the nine months amounted to US$39.8 million

· Net profit for the nine months reached US$27.9 million. Significant factor influencing the net profit was depreciation of the rouble versus the US dollar, which resulted in valuation gain of US$134.8 million and foreign exchange loss US$77.8 million

· Gross value of portfolio of properties remained largely unchanged at US$2.5 billion

· Cash, cash equivalents and marketable securities amounted to US$97.3 million

Operational highlights

· AFIMALL City operations continued to demonstrate positive dynamics with revenues rising 11% year-on-year to US$82.7 million

- NOI was US$64.3 million for the nine months, representing growth of 33% year-on-year

- Average monthly footfall up 8% in September 2014 compared to September 2013

- Occupancy levels at 82% of total leasable area

· Sales of apartments continue at Odinburg with 416 sale contracts signed (as of 17 November 2014)

Commenting on today's announcement, Lev Leviev, Executive Chairman of AFI Development, said:

"In the third quarter AFI Development continued to demonstrate sustainable operating results, while the general macroeconomic situation in Russia has been marked by negative sentiment. We are closely monitoring our projects to address the current economic uncertainty in order to achieve optimal performance in both our development and completed properties."

Q3 2014 Results Conference Call:

AFI Development will hold a conference call for analysts and investors to discuss its Q3 2014 financial results on Wednesday, 19 November 2014, following the publication of the Company's financial results.

The details for the conference call are as follows:

Date: Wednesday, 19 November 2014

Time: 3pm GMT (6pm Moscow)

Dial-in Tel: International: +44 (0) 20 3003 2666

UK toll free: 0808 109 0700

US toll-free: 1 866 966 5335

Russia toll-free: 8 10 8002 4902044

Password: AFI

Please dial in 5/10 minutes prior to the commencement time giving your name, company and stating that you are dialling into the AFI Development conference call quoting the reference AFI.

A replay facility will be available for 1 week following the call. To access the recording, please dial +44 (0)20 8196 1998 and enter access code 1345385.

Prior to the conference call, the Q3 2014 Investor Presentation of AFI Development will be published on the Company website at http://www.afi-development.com/en/investor-relations/reports-presentations on 19 November 2014 by 11am GMT (2pm Moscow time).

- ends -

For further information, please contact:

AFI Development, Moscow +7 495 796 9988

Ilya Kutnov

Ekaterina Shubina

Citigate Dewe Rogerson, London +44 20 7638 9571

David Westover

Sandra NovakovShelly Chadda

About AFI Development

AFI Development is one of the leading real estate development companies operating in Russia. Established in 2001, AFI Development is a publicly traded subsidiary of Africa Israel Investments Ltd.

AFI Development is listed on the Main Market of the London Stock Exchange and aims to deliver shareholder value through a commitment to innovation and continuous project development, coupled with the highest standards of design, construction and quality of customer service.

AFI Development focuses on developing and redeveloping high quality commercial and residential real estate assets across Russia, with Moscow being its main market. The Company's existing portfolio comprises commercial projects focused on offices, shopping centres, hotels and mixed-use properties, and residential projects. AFI Development's strategy is to sell the residential properties it develops and to either lease the commercial properties or sell them for a favourable return.

AFI Development is a leading force in urban regeneration, breathing new life into city squares and neighbourhoods and transforming congested and underdeveloped areas into thriving new communities. The Company's long-term, large-scale regeneration and city infrastructure projects establish the necessary groundwork for the successful launch of commercial and residential properties, providing a strong base for future.

Legal Disclaimer

Some of the information in these materials may contain projections or other forward-looking statements regarding future events, the future financial performance of the Company, its intentions, beliefs or current expectations and those of its officers, directors and employees concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and business. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could," "may" or "might" or the negative of such terms or other similar expressions. These statements are only predictions and that actual events or results may differ materially. Unless otherwise required by applicable law, regulation or accounting standard, the Company does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia and market change in the industries the Company operates in, as well as many other risks specifically related to the Company and its operations. 

Chairman and Executive Director's Combined Statement

The third quarter of 2014 saw continued deterioration in macroeconomic conditions in Russia. The combination of declining oil price, targeted sanctions and continued conflict in the Ukraine caused significant depreciation of the Russian rouble versus the US dollar and other currencies, which is expected to result in increased inflation levels, reduced consumer spending and can have negative influence on the real estate market in the coming quarters. At this stage the Company cannot estimate the influence of these events on its financial performance.

Despite challenges arising from such an operating environment, AFI Development remained focused on delivering its strategy aimed at continued development and expansion of the Company's portfolio, and on generating returns from our completed assets.

AFIMALL City continued to exhibit steady growth in rental revenues and occupancy levels, with NOI for the nine months reaching US$64.3 million, 33% growth year-on-year.

At the same time, development of Odinburg residential complex remains on track.  Construction works there continue with completion of the first building expected by the end of Q2 2015 with construction of the second building underway.

Projects update

AFIMALL City

During the third quarter of 2014 AFIMALL City continued to improve its operating performance, with NOI increase of 11% compared to the second quarter. NOI for the nine months reached US$63.1 million, representing growth of 35% year-on-year. The average monthly footfall in September 2014 was 8% higher compared to September 2013.

Two well-known international retailers have recently opened their flagship Russian shops at AFIMALL City. In September 2014, American furniture and home décor retail chain Crate&Barrel opened its first Russian shop, totalling about 2,700 sq.m., in the mall. In October 2014, Forever 21, a popular American fashion brand, opened its first Russian store at AFIMALL City. Thousands of clients attended the grand opening of the flagship Forever 21 store, which is set across two levels covering approximately 1,500 sq. m. 

Regarding the recently filed claim by the Prosecution Office of the Moscow Central District on fire safety issues, AFI Development confirms that the works requested by the State Fire Safety Control Authorities have been completed by the specified deadlines. The Company expects the claim to be dismissed by the court.

Tverskaya Plaza Ic

The Company has appointed the general contractor and is ready to start the main construction phase subject to obtaining debt financing for the project at favourable terms.

Odinburg

Construction at Odinburg is progressing to plan. In November 2014, construction reached the twenty second floor of the first building, the construction of the second building is ongoing.

As of the date of publication of this release, 416 contracts for sales of apartments have been signed.

Expolon (Kossinskaya)

On 17 November, AFI Development's Board of Directors decided to place on hold and reconsider further implementation of the development concept of the Company's apparel and fashion wholesale trade centre "Expolon", in light of the current economic situation in Russia.

Botanic Garden

On 16 October 2014, AFI Development announced the decision of a Moscow court to liquidate the former "primary investor" in the Botanic Garden project, Novoe Koltso Moskvy OJSC ("NKM"), resuming its bankruptcy proceedings. Should none of NKM's creditors appeal the decision, the liquidation shall become final and AFI Development will be able to restore the project, which was written-off in August 2012, on its books. The effect of the reversal of the previous write-off will be based on the value of the property, which will be determined by independent appraisers on the date when the liquation of NKM is completed.

Lev Leviev Mark Groysman

Executive Chairman of the Board Executive Director

ANNEX A 

30.9.14 - Very significant property disclosure

1. AFIMALL City

ANNEX B

30.9.14 - Very significant loans disclosure

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the period from 1 January 2014 to 30 September 2014

C O N T E N T S

Independent auditors' report on review of condensed consolidated interim financial information

Condensed consolidated income statement

Condensed consolidated statement of comprehensive income

Condensed consolidated statement of changes in equity

Condensed consolidated statement of financial position

Condensed consolidated statement of cash flows

Notes to the condensed consolidated interim financial statements

Independent auditors' report on review of condensed consolidated interim financial information to the members of AFI DEVELOPMENT PLC

Introduction

We have reviewed the accompanying condensed consolidated statement of financial position of AFI Development PLC as at 30 September 2014, the condensed consolidated statements of income, comprehensive income, changes in equity and cash flows for the nine-month period then ended and notes to the interim financial information ('the condensed consolidated interim financial information'). The Company's Board of Directors is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with IAS 34 "Interim Financial Reporting". Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial information as at 30 September 2014 is not prepared, in all material respects, in accordance with IAS 34 "Interim Financial Reporting".

Marios G. Gregoriades CPA

Certified Public Accountant and Register Auditor

For and on behalf of

KPMG Limited

Certified Public Accountants and Registered Auditors

14 Esperidon Street

1087 Nicosia, Cyprus

17 November 2014

CONDENSED CONSOLIDATED INCOME STATEMENT

For the period from 1 January 2014 to 30 September 2014

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the period from 1 January 2014 to 30 September 2014

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the period from 1 January 2014 to 30 September 2014

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2014

The condensed consolidated interim financial statements were approved by the Board of Directors on 17 November 2014.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the period from 1 January 2014 to 30 September 2014

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the period from 1 January 2014 to 30 September 2014

 1. INCORPORATION AND PRINCIPAL ACTIVITY

AFI Development PLC (the "Company") was incorporated in Cyprus on 13 February 2001 as a limited liability company under the name Donkamill Holdings Limited. In April 2007 the Company was transformed into public company and changed its name to AFI Development PLC. The address of the Company's registered office is 165 Spyrou Araouzou Street, Lordos Waterfront Building, 5th floor, Flat/office 505, 3035 Limassol, Cyprus. The Company is a 64.88% subsidiary of Africa Israel Investments Ltd ("Africa-Israel"), which is listed in the Tel Aviv Stock Exchange ("TASE"). The remaining shareholding of "A" shares is held by a custodian bank in exchange for the GDRs issued and listed in the London Stock Exchange ("LSE"). On the 5th of July 2010 the Company issued by way of a bonus issue, 523,847,027 "B" shares, which were admitted to a premium listing on the Official List of the UK Listing Authority and to trading on the main market of LSE. On the same date, the ordinary shares of the Company were designated as "A" shares.

These condensed consolidated interim financial statements of the Company for the period from 1 January 2014 to 30 September 2014 comprise of the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in jointly controlled entities. 

The principal activity of the Group is real estate investment and development. The principal activity of the Company is the holding of investments in subsidiaries and joint ventures.

2. basis of preparation

Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting". They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2013.

Use of judgements and estimates

In preparing these interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2013.

Measurement of fair values

The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values and reports directly to the CFO.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified.

Significant valuation issues are reported to the Group Audit Committee.

When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

· Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

· Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

· Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2013, except for the adoption of new standards and interpretations effective as of 1 January 2014.

Several new standards and amendments apply for the first time in 2014. However, they do not impact the annual consolidated financial statements of the Group or the interim condensed consolidated financial statements of the Group.

Standards, amendments to standards, and interpretations issued but not yet endorsed by the EU

IFRS 15 - "Revenue from Contracts with Customers". The new standard provides a unified application that regulates the accounting treatment of revenue arising from contracts with customers. This standard supersedes IAS 18 "Revenue" and IAS 11 "Construction Contracts" and the accompanying interpretations thereof. The core principle of the standard is the recognition of revenue from the transfer of goods or services to customers in an amount that represents the economic benefits that the entity expects to receive in return for them. As such, the standard stipulates that the recognition of revenue will occur when the entity transfers the goods and/or services to the customer and the customer obtains control of those goods or services.

The standard is effective for annual periods beginning on or after 1 January 2017, with early adoption permitted under IFRS. However since not endorsed by the EU yet, early adoption is not permitted by the Group.

Functional and presentation currency

These consolidated financial statements are presented in United States Dollars which is the Company's functional currency. All financial information presented in United States Dollars has been rounded to the nearest thousand, except when otherwise indicated.

Foreign operations

Each entity of the Group determines its own functional currency and items included in the financial statements of each entity are measured using its functional currency. Where the functional currency of an entity of the Group is other than US Dollars, which is the presentation currency of the Group, then the financial statements of the entity are translated in accordance with IAS 21 'The effects of changes in foreign exchange rates".

The table below shows the exchange rates of Russian Roubles, which is the functional currency of the Russian subsidiaries of the Group, to the US Dollar which is the presentation currency of the Group:

Exchange rate % change % change

Russian Roubles quarter year to date

As of: for US$1

30 September 2014 39.3866 17.12 20.34

30 June 2014 33.6306

31 March 2014 35.6871

31 December 2013 32.7292 7.8

30 September 2013 32.3451 (1.11) 6.5

Average rate during:

Nine-month period ended 30 September 2014 35.3878

Nine-month period ended 30 September 2013 31.6170

Three-month period ended 30 September 2014 36.1909

Three-month period ended 30 September 2013 32.7977

3. significant accounting policies

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 December 2013.

4. OPERATING SEGMENTS

The Group has 5 reportable segments, as described below, which are the Group's strategic business units. The following summary describes the operation in each of the Group's reportable segments:

· Development Projects - Commercial projects: Include construction of property for future lease.

· Development Projects - Residential projects: Include construction and selling of residential properties.

· Asset Management: Includes the operation of investment property for lease.

· Hotel Operation: Includes the operation of Hotels.

· Other - Land bank: Includes the investment and holding of property for future development.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal management reports that are reviewed by the Group's management team. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm's length basis.

Reconciliation of reportable segment profit or loss

5. REVENUE

6. ADMINISTRATIVE EXPENSES

7. other expenses

8. FINANCE COST AND FINANCE INCOME

9. tAX EXPENSE

10. INVESTMENT PROPERTY

Reconciliation of carrying amount

The investment property was revalued by independent appraisers on 30 June 2014. The cumulative adjustments, for all projects, are shown in line "Fair value adjustment" in the table above.

The decrease due to the effect of the foreign exchange rates is a result of the weakening of the Rouble compared to the US Dollar by 20%, during the nine-month period ended 30 September

2014. The fair value adjustment gain is mostly related to this rouble weakening.

 The real estate market in Russia has continued to witness challenging conditions during the third quarter of the year. The combination of targeted sanctions, the continuing conflict in Ukraine and further unrest in Syria and Iraq has meant that there have been increasingly negative expectations, which have now become commonplace since the summer of 2014.

 With regard to rental levels, the depreciation of the Rouble over the past nine months has seen tenants' costs of occupation under upward pressure. Overall there is a certain tolerance in the market to currency fluctuations with business models able to absorb changes, to a degree, while the impact of inflation can, to an extent, offset the impact of currency depreciation. As at the end of the third quarter of 2014, there have been some reductions in prime rental values within the Moscow logistics warehousing sector, as well as for asking rents in the office and retail sectors. However, it is important to note that well located quality developments as most of AFI Development assets still appear to be relatively insulated from any overall trends for rents.

With regard to capitalization rates, although Standard & Poor's lowered its outlook on Russia's ratings to negative in late March and the target interest rate of the Central Bank has been increased, these developments had yet to have a significant impact on yields.

Given the above and based on the opinion of our independent appraisers the value of the assets within the portfolio reported in June 2014 have not been subject to any significant changes. The same applies for investment property under development in note 11 below.

11. INVESTMENT PROPERTY UNDER DEVELOPMENT

During the period the Company disposed its 100% share in Keyiri Trade & Invest Limited with its Russian subsidiary Favorit LLC, holding rights to the St Petersburg project, of a book value of US$1,400 thousand. For further details refer to note 22.

The investment property under development was revalued by independent appraisers on 30 June 2014. The cumulative adjustments, for all projects, are shown in line "Fair value adjustment" in the table above.

The decrease due to the effect of the foreign exchange rates is a result of the rouble weakening compared to the US Dollar by 20%, during the nine-month period ended 30 September 2014. The fair value adjustment gain is mostly related to this rouble weakening.

12. PROPERTY, PLANT AND EQUIPMENT

13. INVENTORY OF REAL ESTATE

As previously announced, in August 2012 AFI Development wrote-off its rights to the project "Botanic Gardens" following initiation of bankruptcy proceedings against the "main investor" under the investment contract, Novoe Koltso Moskvy OJSC ("NKM"), while continuing its efforts to secure development rights to the project.

On 5 February and 21 February 2013, the Company reported that, as a result of negotiations with the Moscow city authorities, the Company's development rights to the project have been recognised through an addendum to the investment contract for the project. According to this addendum, NKM shall not have any claims to the investments made by AFI Development in the Botanic Garden project and its subsidiary, Nordservice LLC, became the only investor under the investment contract.

In May 2014, the Company made further progress towards restoring the Botanic Garden project on its balance sheet. As a creditor of NKM and a participant in its bankruptcy proceedings, Nordservice LLC purchased additional rights of claim against NKM for US$5.6 million. Since the project is currently written off based on the opinion of its legal advisers that any recovery of the Company's costs relating to its investments in the project was unlikely, those costs including other non-material costs were impaired to profit or loss. The total costs paid during the period for Botanic Garden project which were impaired amount to US$17.5 million (2013: US$1 million). For further details refer to note 27.

14. TRADING PROPERTIES

Trading properties comprise unsold apartments and parking places.

15. TRADING PROPERTIES UNDER CONSTRUCTION

Trading properties under construction comprise "Odinburg" project which involves primarily the construction of residential properties.

16. TRADE AND OTHER RECEIVABLES

Trade receivables net

Trade receivables are presented net of an accumulated provision for doubtful debts of US$9,039 thousand (2013: US$12,658 thousand).

17. CASH AND CASH EQUIVALENTS

18. SHARE CAPITAL AND RESERVES

Employee Share option plan

There were no changes as to the employee share option plan during the nine-month period ended 30 September 2014.

Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations to the Group presentation currency and the foreign exchange differences on loans designated as loans to an investee company which are accounted for as part of the investor's investment (IAS21.15) as their repayment is not planned or likely to occur in the foreseeable future. These foreign exchange differences are recognised directly to Translation Reserve.

Retained earnings

The amount at each reporting date is available for distribution. No dividends were proposed, declared or paid during the nine-month period ended 30 September 2014.

19. LOANS AND BORROWINGS

There were no material changes to loans during the nine-month period ended 30 September 2014 apart from the following:

During the first quarter of 2014 the Group received the fifth and final tranche, of total approximately US$36,986 thousand (RUR 1,333 million), of the secured loan from VTB Bank designated for the payment of the fourth instalment to the City of Moscow, for the acquisition of the parking area under the AFIMALL City. In addition the Group made the first, second and third quarterly payments of US$6.5 million each on account of the principal of the loans as per the agreed loan facility.

The remaining amount of US$205 million of the loan from VTB Bank received on 25 January 2013 by the Group's subsidiary Crown Investments LLC was reclassified to current liabilities as its repayment is due within the next twelve months.

20. TRADE AND OTHER PAYABLES

Payables to related parties

Include an amount of US$2,274 thousand (31/12/13: US$3,282 thousand) payable to Danya Cebus Rus LLC, related party of the Group, for contracts signed in relation to the construction of Group's project.

Amount payable for the acquisition of properties

During the first quarter of 2014 the Group paid the fourth and final installment for the acquisition of the parking area under the AFIMALL City using the loan tranche as described in note 19.

21. ADVANCES FROM CUSTOMERS

Represent advances received from customers for the sale of residential properties at "Odinburg" project.

22. DISPOSAL OF INVESTMENT IN SUBSIDIARIES/JOINT VENTURES

The profit on disposal of non-significant subsidiaries comprises of Keyiri Trade and Invest Ltd together with its subsidiary OOO Favorit and OOO Sever Region K. The selling price of the disposal was $1,400 thousand. The resulting profit on sale amounting to US$61 thousand was recognised in the income statement.

The selling price of the disposal of Westec Four Winds Ltd was US$103,380 thousand. The resulting profit on sale amounting to US$32,088 thousand and a translation reserve of US$30,288 thousand was reclassified as a realised exchange loss in financing expenses of the income statement of first quarter 2013.

The above disposal had the following effect on the Group's assets and liabilities:

23. FINANCIAL INSTRUMENTS

Carrying amounts and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels and the fair value hierarchy for financial instruments measured at fair value. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Carrying amounts and fair values (continued)

24. CONTINGENCIES

There weren't any contingent liabilities as at 30 September 2014.

25. FINANCIAL RISK MANAGEMENT

The Group's financial risk management objectives and policies are consistent with that disclosed in the consolidated financial statements as at and for the year ended 31 December 2013.

Russian business and economic environment

Information on the Russian business and economic environment is provided in conjunction with the real estate market analysis in note 10.

26. RELATED PARTIES

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. The person is a member of the key management personnel of the entity or its parent (includes the immediate, intermediate or ultimate parent). Key management is not limited to directors; other members of the management team also may be key management. 

27. SUBSEQUENT EVENTS

· On 16 October 2014 the Company announced that a Moscow court decided to liquidate the former "primary investor" in the Botanic Garden project, Novoe Koltso Moskvy OJSC ("NKM"), resuming its bankruptcy proceedings. Should no one of its creditors appeal the decision, the liquidation shall become final and AFI Development Plc will be able to restore the project, which was written-off in August 2012, in its books. The effect of the reversal of the previous write off will be based on the value of the property, which will be determined by independent appraisers on the date the liquidation of NKM is completed.