While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards: - PS1: Social and Environmental Assessment and Management Systems - PS2: Labor and Working Conditions - PS3: Pollution Prevention and Abatement - PS4: Community Health, Safety and Security Due to this project being located in a city center location, no impacts were identified in relation to Biodiversity Conservation and Sustainable Natural Resource Management (PS6), and Indigenous Peoples (PS7). Land Acquisition and Involuntary Resettlement (PS5) is not relevant because the site for the proposed business center was obtained through a private willing seller/willing buyer situation and has been owned by the Elite Group since 2004. The Project will also not impact cultural heritage (PS 8): no items of cultural heritage were uncovered during early construction when ground was disturbed.

Key social and environmental issues associated with this project include: life and fire safety design standards, and ongoing management of fire protection systems during operation; working conditions during construction and operation, management of occupational health and safety and environmental impacts during construction, and design and operation for efficient use of energy and water. These issues are site-specific and readily addressed through mitigation measures. In addition, the project does not have E&S impacts related to Performance Standards 5, 6, 7 or 8. This is therefore a Category B project.

The Company has presented plans to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with host country/international L&FS requirements, environmental and social requirements as well as IFC’s Environmental and Social Performance Standards and HSE guidelines. The information about how these potential impacts are being/will be addressed by the project is summarized in the paragraphs that follow. PS1: Social and Environmental Assessment and Management Systems: Management Systems IFC’s assessment considered Elite’s commitment to establish life and fire safety master plans, environmental management systems, including an improvement of existing OHS management system. With the Company committed to long term sustainable development of its investment the following will be guiding the project and ensure compliance with PS1: The Elite Group management proactively addresses environmental, social, quality, and occupational health & safety aspects associated with its operations. The Elite Group has implemented an occupational health and safety management system certified to OHSAS 18001 (occupational health & safety management system) standard since 2007. The OHS management system is applicable to all of Elite Group’s projects/operations and includes procedures for: hazard identification, risk assessment and determining control; compliance with regulatory requirements; development and implementation of management programs; incident and accident handling, recording, reporting, investigation and analysis; emergency preparedness and response; responsibility distribution; training and awareness; communication and consultation; monitoring, recording, reporting; internal audit; corrective action; and management review. The OHS management system is well implemented and adherence to the system by all contractors on its sites is maintained through an active safety training program which is in place for contractor’s labor, as well as a training program for employees. In addition to its occupational health and safety procedures the Elite Group has an ISO 9001-certified quality management system whose use contributes to sustainable development of its operations. The scope of the certification covers design, construction, operation, senior management review and is applied to all projects of Elite Group including Elite Plaza project. The Elite Group has stated its commitment of continual improvement in the corporate Policies of Health & Safety, Social & Human Resource and Quality management system. Assessment No formal Environmental Impact Assessment (EIA) is required by Armenian authorities and was not undertaken for this project having regard for limited E&S impacts. However, Elite Group has implemented planning process including necessary assessment and permitting in accordance with local requirements in Yerevan. The acquired land plot is not subject to historical environmental or social liabilities. The building is located in an established business neighborhood and will be connected to all necessary utility suppliers and so is expected to have limited environmental and social impact. A traffic study was undertaken, and this concluded that the building’s traffic impact will be adequately managed by the parking spaces incorporated into the building design. In addition, and at IFC’s request, an assessment was made of the compliance of life and fire safety aspects of the Project’s proposed design and operation with local and the NFPA 101 Life Safety Code. Management Program Since the company has a formal quality, health and safety integrated management system (IMS) in place, a key elements of environmental management system such as policy, procedures and practices for construction activities has already been established. Elite Group outsources its construction services to large construction companies. Contracts require complete compliance with Armenian laws. Elite Group has a construction supervisor at site during the construction process; and among other duties this supervisor oversees the EHS performance of the contractors. Elite Group provides ongoing management of performance after completion of the installation and commissioning work. In the case of this project, a new company Elite Plaza owns the unfinished construction project and will operate the building on completion, having responsibility for its social and environmental performance. Elite Plaza will adopt environmental and social management systems and structures which reflect those of the Elite Group, though with adaptation to reflect differences between construction and operational risk. Elite Plaza will appoint the EHS Manager and extend an existing OHS system by supplementing elements of environmental management system to Elite Plaza to ensure compliance with IFC’ PS1. Community Engagement To date there has been little formal community consultation about the project, since this was not required by the local legislation. However, the project was discussed at Architectural council of Yerevan Municipality, and the main characteristics of this high–profile project, if not all E&S details are well known to the local community, and the project company maintains informal engagement with the local community. The Company will make a copy of the ESRS and Environmental and Social Action Plan available in a public place near the project and main office for a period of 30 days, and will publicize these documents’ availability. In addition, the Project will establish a formal community communication channel which will be available to receive comments or grievances about the project, in both the construction and operational phases. PS2: Labor and Working Conditions: The Elite Group itself employs 45 people, including design specialists and engineers. The Elite Group’s Social and Human Resource Policy is consistent with the Labor Code of Armenia, which incorporates the ILO core labor standards and, hence, corresponds with PS2 requirements. In addition, various benefits for Company’s employees such as workers’ salary, benefits and personnel training are addressed in internal labor regulations. The Elite Group’s employees are not organized in any trade union though are free to join a union should they choose to do so, in compliance with Armenian legislation. The Company does not use foreign workers on the construction site. The Elite Group is enabling additional means for workers to express their grievances regarding working conditions and terms of employment, including assessment of workers’ satisfaction through periodic questioning. The Elite Group has committed to establish a grievance procedure consistent with IFC PS requirements, through which workplace concerns and suggestions can be brought to the management’s attention and addressed expeditiously. The client will inform the workers of the grievance mechanism at the time of hire, and make it easily accessible to them. The Company will amend its current Social and HR policy to include a formal employee grievance mechanism, specific statements regarding non-discrimination provision, an equal opportunities, and disseminate revised version by internally (to all staff) and externally (on website: www.elitegroup.am). Occupational health and safety is managed through a formal OHSAS 18001- certified management system, certification valid until September 2010. The last surveillance audit was performed in August 2009 by an independent certification body with no major/minor non-compliances of OHSAS 18001 standard. The Company provides safety induction and ongoing training for all workers, including requiring its contractors to adhere to the OHS procedures. The Elite Group provides personal protective equipment (PPE) to all employees including construction workers. While use of PPE at project site is adequate, the Company will continue to focus on further improving the use of PPEs, particularly under dangerous working conditions (e.g. working at height). The Company includes in its contracts with its subcontractors a requirement to receive OHS training materials, implement its requirements and to comply with host country legislation on labor and OHS conditions. The Elite Group has had no accidents on its sites within the last 5 years, which indicate that the OHS system for protecting the construction workers is effective. The Company has procedures for recording, investigation and reporting of OHS incidents including involving contractors’ labor. The Company monitors OHS performance by the Committee of Safety on a monthly cycle and Management reviews annually. PS3: Pollution Prevention and Abatement: The operation is relatively simple in respect to pollution prevention and control. The business center will receive water and electricity from the private local utility companies, and will discharge waste water to the municipal treatment systems. The business center building has its own gas fired boiler for heating, a diesel generator with double-walled underground tank (for electricity backup), air conditioning with a water loop chiller system, and emergency water reservoirs. Domestic waste will be handled by the local municipal system. Construction wastes are contractually assigned and managed by contractors in accordance with Armenian law, and this is stipulated in contracts with contractors. Solid wastes will be collected and disposed of by an authorized waste management company. Hazardous waste and used mercury lamps will be collected and removed by the licensed company. The design of the building includes an energy efficiency features such as an insulation, modern construction materials and heat saving windows. On completion the annual electricity and heat consumption of the building is expected to be 2.5 million kWh and 12.600 GJ respectively, which is reflective of efficient performance for a building of this scale. Building heating will be provided by a natural gas-fired boilers of total capacity below the threshold size requiring monitoring. Annual greenhouse gas emissions associated with the building’s energy consumption and anticipated refrigerant consumption is in the order of 2300 tones CO2 equivalent. Air conditioning will be provided by a chilled-water based system that will utilize the zero ODP refrigerant R407c. PS4: Community Health, Safety and Security: IFC’s assessment considered the Company’s operation with regard to the impacts of the construction and operation of the business center. The building has been designed for compliance with relevant Armenian life and fire safety requirements. IFC commissioned an audit by a fire safety specialist to confirm compliance of the building as designed and constructed to date with both Armenian and an international fire safety code, in this case the National Fire Protection Association (NFPA) 101 Life Safety Code. The audit report identified a number of revisions required for NFPA 101 compliance, including changes to fire egress, compartmentation, and alarms systems, and to develop further the suppression systems to include sprinklers throughout, and enhanced water storage and pumping capacity. The Company has agreed to revise building design to achieve compliance with the NFPA code as well as all applicable local requirements. Armenia is located in an active seismic zone, and introduced a new national seismic code SNIP – II 2.02.95 following a disastrous earth quake in the late 1980s. This code is designed to protect buildings in the event of an earthquake of up to Richter Scale 9. Regular inspections during the construction process, as required by local regulators confirm that the building is constructed in a manner compliant with design and with code requirements. Among other things, building design features structural elements of the podium which are reinforced with “steel cages”; an application of anti seismic rubber cushions to strengthen the seismic stability of the newly built high rise tower. The Elite Group, as part of the OHS management system, will improve and implement procedures to minimize community health and safety impacts at the construction site by: providing fluorescent, lighted and flagged danger and diversion signs when traffic is affected; and access control to the site. The Elite Group will ensure that its contractors adopt good EHS practices, in particular, ensure that the contractors drivers are trained in safe driving techniques; using safe traffic control measures, develop a movement plan to ensure that vehicle movement during construction has minimal impact on nearby communities and pedestrians; and periodically monitor noise levels in potentially affected nearby communities and implement mitigation measures where required.

Publication of this ESRS and associated ESAP constitutes the client’s first community engagement related to its project plan. Such engagement is not required by the limited potential for adverse environmental and social impacts. Going forward, the company will establish a formal system to receive comments from members of the public. These comments will be studied and acted upon by the company’s senior management.

The ESRS will be translated into Armenian language and locally disclosed on posters outside the “Elite Plaza” site at Khorenatsi Street, Yerevan, Armenia. Contact details are as follows. Mr. Armen Mkoyan,President,21/3, Pushkin Street, Yerevan, Armenia. Email: info@elitegroup.amTel: +374 10 566922 Fax: +374 10 566988