SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K





x ANNUAL REPORT PURSUANT
TO SECTION 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934


For the
fiscal year ended: December 31, 2008


OR


oTRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
transition period from __________ to __________





Commission
File No. 000-23712





PROMOTORA
VALLE HERMOSO, INC.


(Exact
name of Registrant as Specified in Its Charter)






Colorado
            
            02-0755762(State or other
      jurisdiction of
              Incorporation or
      organization)
            
            (I.R.S.
      Employer
              Identification
      No.)




301
      East Pine Street, Suite 150, Orlando, FL
              
              32801(Address
      of Principal Executive Offices)
              
              (Zip
  Code)





Issuer's
      Telephone Number, Including Area Code:  (407)
      210-6541





Securities
registered pursuant to Section 12(b) of the Act:  None





Securities
registered pursuant to Section 12(g) of the Act:  Common Stock, $.001
par value per share





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.Yes  o  No x





Indicate
by checkmark if the registrant is not required to file reports to Section 13 or
15(d)Of the Act.   o Yes  x No





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities  Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. x  Yes    o  No





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a smaller reporting company.  (Check
One):




Large accelerated
      filer  o
            Accelerated
      filer  oon-accelerated
      filer    o
            Smaller reporting
      company  x(Do not check if a
      smaller reporting company)




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). o  Yes 
x  No





The
aggregate market value of the voting and non-voting common equity held by
non-affiliates  as of the last business day of the registrant’s most
recently completed second fiscal quarter was $11,180,733.





Number of
shares of Common Stock outstanding as of March 27, 2009: 24,464,799.





Documents
incorporated by reference:  None














TABLE OF
CONTENTS





PART
      I
                    1Item
      1. Business.
                    1Item
      1A. Risk Factors.
                    3Item
      1B. Unresolved Staff Comments.
                    6Item
      2. Properties.
                    6Item
      3. Legal Proceedings.
                    6Item
      4. Submission of Matters to a Vote of Security Holders.
                    6PART
      II
                    7Item
      5. Market for Registrant's Common Equity, Related Shareholder Matters and
      Issuer Purchases of Equity Securities.
                    7Item
      6. Selected Financial Data.
                    8Item
      7. Management's Discussion and Analysis or Plan of
    Operations.
                    8Item
      7A. Quantitative and Qualitative Disclosures About Market
      Risk.
                    13Item
      8. Financial Statements and Supplementary Data.
                    14Item
      9. Changes In and Disagreements With Accountants on Accounting and
      Financial Disclosure.
                    16Item
      9A (T). Controls and Procedures.
                    16Item
      9B. Other Information.
                    16PART
      III
                    17Item
      10. Directors, Executive Officers, and Corporate
    Governance.
                    17Item
      11. Executive Compensation.
                    22Item
      12. Security Ownership of Certain Beneficial Owners and Management and
      Related Stockholder Matters.
                    23Item
      13. Certain Relationships and Related Transactions, and Director
      Independence.
                    23Item
      14.  Principal Accountant Fees and Services
                    24Item
      15. Exhibits and Financial Statement Schedules.
                    25





ii




PART I




Item
1. Business.




Background





We were
incorporated under the laws of the State of Colorado on January 6,
1999.   Prior to August 5, 2008, we were engaged in the housing
business in the Republic of Ecuador.  Effective March 24, 2008, we
entered into an Acquisition Agreement (the “Agreement”) with stockholders of
OJSC “494 UNR”, a  corporation incorporated under the laws of the
Russian Federation (“494 UNR”), providing for the acquisition by the Company of
66.83% of all of the outstanding shares of common and preferred stock of 494
UNR.  At the closing under the Agreement on August 5, 2008, we issued
20,500,000 shares of our common stock to the controlling stockholder of 494 UNR.
The Agreement provided for resignation at closing of the Company’s officers and
directors and the appointment of new officers and a new Board of Directors, as
well as for the sale of the Company’s existing business to former
management.





The
acquisition by the Company of 494 UNR was completed at a closing on August
5, 2008. Unless otherwise indicated or the context otherwise requires, the terms
“we,”  “us,”  “our,”  and the “Company” refer to
Promotora Valle Hermoso, Inc. and its subsidiary 494 UNR.





General





494
UNR  commenced operations in 1967 as a construction/infrastructure
services component of the Russian government construction operations. It
operated historically as a construction and infrastructure construction and
maintenance company primarily in Moscow and the Moscow area. It specialized in
general and infrastructure construction services, including the construction and
maintenance of roads, highways and bridges, design/build apartment and office
buildings and parks, warehouses, shopping centers and retail facilities, hotels,
commercial housing projects and light industrial projects for governments,
developers, businesses and end users. 494 UNR  also performed
activities such as demolition, clearing, large-scale earthwork and grading,
dewatering, drainage improvements and structural concrete. Historically it
constructed various types of buildings and building complexes in government
projects, and took part in reconstruction of the Moscow ring highway and
building and reconstructing federal government roads.





In 1998,
the operation of 494 UNR’s business was transferred to an Open Joint Stock
Company (OJSC) 494 UNR, which was incorporated in Bronnitsy town, Moscow area,
under the laws of Russian Federation, and controlled by our principal
stockholder Alexei Ivanovich Kim,.





Commencing
about the year 2000, 494 UNR began also to concentrate its construction
activities on project development and construction and, in the infrastructure
area, material supply. We are licensed as a construction contractor by the
Russian Federal Agency for Construction and Municipal Economy for building first
and second grade residential and business projects. We will have to renew our
license in 2013. We operate for the most part as a general contractor and use
subcontracting companies for construction and infrastructure installation
services. At  present, in addition to general construction services,
we develop and construct multi-functional multi-flat residential complexes and
produce and supply infrastructure projects with a proprietary polyethylene road
base material. The product forms a base beneath asphalt similar to a net to make
roadbed stable. Our road base product can also be used in reinforcement of earth
banks and slopes bordering roads, the bases of bridges, in the construction of
airports, or, for example, for reinforcement of ski slopes.  We
manufacture our road base product in the Russian Federation using manufacturing
partners; however, we own the patents for this product, which cover the material
itself and the ultrasonic welding used in the production of the material. These
patents are at this time filed only in the Russian Federation.





The
principal offices of 494 UNR are located at 4, Stroitelnaya Street, Bronnitsy,
Moscow District, Russian Federation 140170, telephone: (495) 771
6719.





1





Industry
Background in the Russian Federation




In last
three years Russia has experienced an economic boom, although now the Russian
economy’s growth rate is expected to slow significantly over the next year. In
2007, there was a 7.8% increase in real GDP. Russia’s residential housing market
has tracked this growth driven by strong growth in real disposable income; a
comprehensive government housing program, which has envisions the construction
of approximately 140 million square meters of housing annually by 2015; and
decreasing household size and urbanization of the population. In 2000,
residential construction growth was at an average rate of 8.7% per annum to
reach 50.2 million square meters in 2006 and 60.2 million square meters in
2007.





Because
of the recent international liquidity crisis, there has been a decrease of
demand for housing, but the Russian Government has announced measures to
refinance mortgages to support the construction industry. We are participating
in Presidential program 15X15 to provide former military personnel with housing
and have our development projects in key locations in Moscow and in the Moscow
area.





Infrastructure
projects, where our product for roadbed base and banks and slopes base
reinforcement is used, are still a primary focus of the Russian Government. For
financing infrastructure projects in the first quarter of 2009, Gazprom, Rosneft
and other large companies may issue infrastructure bonds (guaranteed by a
government program).





It is our
view that the fundamentals of supply and demand for the type of projects in
which we are primarily engaged, quality real estate and infrastructure projects
in Russia, remain solid in the medium to long term, and that we have made
appropriate adjustments for the recent changes in Russian real estate market and
infrastructure projects in that market.





Customers





For
residential housing we have a diverse range of customers, mostly middle-class
and upper middle-class families.  The wealth of Russian families has
increased during last five years. There are some new customers who can buy a
flat without mortgage, and the percentage of buyers utilizing mortgages is
significantly lower than in the United States or the European Union.
Approximately 60% of our sales in 2008 were for private customers and
approximately 40% were projects for governmental entities, together with
individual participants in the projects in special programs of the Russian
Government designed to increase the available housing supply. We participate in
Presidential programs for maintenance of residential housing.




We had
sales in 2008 to one residential housing customer that accounted for 14.7% of
consolidated net sales in that year.





For our
road base product, governmental infrastructure projects accounted for
approximately 80% of sales in 2008, including the construction departments of
the biggest government-controlled oil and gas corporations, GAZPROM and
TRANSNEFT, and approximately 20% of sales was accounted for by private entities
that are subcontractors for government infrastructure construction
projects.





Sales
and Marketing





The sales
and marketing strategy of our company is developed by our marketing department
and in cooperation with internationally-known companies (for example, CBRE).





Competition




The
Moscow and Moscow area market of for real estate development is very large;
there are more than 110 companies operating in this market. We believe that we
are in the top 20 of these companies in terms of our size. In Moscow alone about
five million square meters of housing is constructed annually.





Intellectual
Property





We hold a
patent issued in 1999 by the Russian Agency for Patents and Trademarks for our
"PRUDON-494" road base material, which is a flexible compact structure made from
polymer strips, sealed to each other. When expanded, "PRUDON-494" forms a
spatial cellular grid constructed of polymer strips that reinforces the dirt
road base. The  road base reinforcement that we produce is made by
approximately three other companies in Russia, but we are the sole owner of the
patent on this technology and plan to enforce our exclusive rights to the
technology.  We believe that we are the largest supplier of this road
base material in the Russian Federation.




2




Construction
Practices





We erect
houses with use of special forms (timbering) for construction of the
“monolithic” concrete structure directly on a building site. A monolithic
building structure provides an almost "seamless" design with better insulation
and soundproofing. At the same time, the structures are more
durable.  After we construct a monolithic concrete structure we fill
in the walls of the building with bricks or concrete blocks and cover them with
façade material.





Insurance





We carry
social insurance for our employees and vehicle insurance for equipment owned by
Company.  Required payments to the Russian government are for the
governmental social fund, medical insurance and pension coverage





Sources
of Materials





We obtain
materials for our construction and infrastructure businesses from a number of
different sources in the Russian Federation. Concrete, metals, bricks, wood and
other construction materials are purchased from and delivered by Russian
producers. We purchase our road base material from any one of three large
petrochemical companies in Russia, which are located in the European part of the
Russian Federation. Usually, we use the closest producer to our production site
for sources of material to reduce transportation cost.





Construction
Contracts




In
certain cases we bid through the official governmental process for the right to
develop a certain project. Our contracts are generally obtained through
competitive bidding in response to advertisements by federal, state and local
government agencies and private parties. Less frequently, development and
construction contracts may be obtained through direct negotiations with private
owners. Our contract risk mitigation process includes identifying risks and
opportunities during the bidding process, review of bids fitting certain
criteria by various levels of management.




We act as
prime contractor on most of the construction projects we undertake. We
accomplish our projects with our own resources and subcontract construction work
and specialized activities such as electrical and mechanical work. As prime
contractor, we are responsible for the performance of the entire contract,
including subcontract work. Thus, we may be subject to increased costs
associated with the failure of one or more subcontractors to perform as
anticipated.




We use
design/build as a method of project delivery. Our construction contracts are
typically two, or greater than two, years in duration with an average contract
size approximately $45 million.




Backlog





Our
backlog includes the total value of awarded contracts that have not been
completed, including our proportionate share of unconsolidated joint venture
contracts. Our backlog was approximately $1.5 billion as of November
2008.





Seasonality





Our
businesses are seasonal. The Winter season from December through February is a
period of substantially reduced residential and other construction projects and
road construction activity.




Item
1A. Risk Factors.




We operate solely in the Russian Federation where we are subject
to economic and political uncertainties. Unexpected and adverse changes in the
Russian Federation could result in project disruptions, increased costs and
potential losses.





We
are vulnerable to the cyclical nature of the construction business.





The
demand for our services and products is dependent upon the existence of projects
with engineering, procurement, construction and management needs. As a result,
our past results have varied considerably and may continue to vary depending
upon the demand for future projects in the industries we serve.





3





Our
business is subject to fluctuations in demand in the Russian Federation and to
changing domestic economic and political conditions which are beyond our
control.





Operating
in the Russian Federation marketplace exposes us to a number of risks
including:





•
            
            abrupt
      changes in government policies and regulations,•
            
            trade
      restrictions;•
            
            tax
      increases; and•
            
            international
      hostilities.





The lack
of a well-developed legal system in the Russian Federation some of these
countries may make it difficult to enforce our contractual rights. Enforcement
of our patent rights for our road base product, for example, would be difficult
and expensive in the Russian Federation. To the extent that our business is
affected by unexpected and adverse economic and political conditions, we may
experience project disruptions and losses. Project disruptions and losses could
significantly reduce our revenues and profits.




Recent
Constraints on the Availability of Credit in the Worldwide Banking System and in
the Russian Federation may Affect our Results of Operations.





We
specialize in infrastructure supply services, and the construction of
design/build apartment and office buildings and parks, warehouses, shopping
centers and retail facilities, hotels, commercial housing projects and light
industrial projects for governments, developers, businesses and end users in the
Russian Federation.  Recent constraints on the availability of credit
in the worldwide banking system and in the Russian Republic could adversely
affect construction and development projects of our customers and have a
consequent adverse effect on our results of operations. As a result, we would
face risks of:





·
            Inability
      of our customers to finance their development and infrastructure projects,
      which would  reduce the demand for our construction services and
      products;





·
            currency
      fluctuations resulting from economic conditions in the Russian Federation;
      and





·
            economic
      instability in our markets in the Russian
  Federation.




We
could face limitations on our ability to access the capital markets.




Our
ability to access the capital markets is subject to various factors, including
general economic and/or financial market conditions. The current conditions of
the financial markets have adversely affected the availability of credit and
liquidity resources and our access to capital markets is more limited until
stability re-emerges in these markets.





We
depend on the services of our Chairman and President and of our Chief Executive
Officer and implementation of our business plan could be seriously harmed if we
lost the services of either one.




We depend
heavily on the services of Alexei I. Kim, our Chairman and President, and of
Alexei A. Kim, our Chief Executive Officer. We do not have an employment
agreement with, nor do we have a “key person” life insurance policy on, either
of these executives to cover our losses in the event of the death of either
individual. There can be no assurance that these executives will remain in their
management positions with us, and the loss of services of either of these two
executives would disrupt our business operations, which could reduce our
revenues and profits.





4




We
bear the risk of cost overruns in some of our contracts. We may experience
reduced profits or, in some cases, losses under these contracts if costs
increase above our estimates.





Under our
fixed price contracts, contract prices are established in part on cost and
scheduling estimates which are based on a number of assumptions, including
assumptions about future economic conditions, prices and availability of labor,
equipment and materials, and other exigencies. If these estimates prove
inaccurate, or circumstances change such as unanticipated technical problems,
difficulties in obtaining permits or approvals, changes in local laws or labor
conditions, weather delays, cost of raw materials, our suppliers’ or
subcontractors’ inability to perform, cost overruns may occur, and we could
experience reduced profits or, in some cases, a loss for that
project.




Our
backlog is subject to unexpected adjustments and cancellations and is,
therefore, an uncertain indicator of our future earnings.





Projects
may remain in our backlog for an extended period of time. In addition, project
cancellations or scope adjustments may occur, from time to time, with respect to
contracts reflected in our backlog. Backlog reductions can adversely affect the
revenue and profit we actually receive from contracts reflected in our backlog.
Finally, poor project or contract performance could also impact our
profits.




If
we guarantee the timely completion or performance standards of a project, we
could incur additional costs to cover our guarantee obligations.





In some
instances, if we fail to complete the project as scheduled, or if the project
subsequently fails to meet guaranteed performance standards, we may be held
responsible for cost impacts to the client resulting from any delay or the costs
to cause the project to achieve the performance standards, generally in the form
of contractually agreed-upon liquidated damages. To the extent that these events
occur, the total costs of the project would exceed our original estimates and we
could experience reduced profits or, in some cases, a loss for that
project.





The
nature of our engineering and construction business exposes us to potential
liability claims and contract disputes which may reduce our
profits.





We have
been and may in future be named as a defendant in legal proceedings where
parties may make a claim for damages or other remedies with respect to our
projects or other matters. These claims generally arise in the normal course of
our business. When it is determined that we have liability, we may not be
covered by insurance or, if covered, the dollar amount of these liabilities may
exceed our policy limits. Any liability not covered by our insurance, in excess
of our insurance limits or, if covered by insurance but subject to a high
deductible, could result in a significant loss for us, which claims may reduce
our profits and cash available for operations.





Our
continued success requires us to hire and retain qualified
personnel.





If we
cannot find and keep the employees necessary to execute our contracts or to
perform necessary corporate activities, it could have a material adverse impact
on our business or financial results.





We
work in the Russian Federation where there are high security risks, which could
result in harm to our employees or unanticipated costs.





Some of
our services are performed in high risk locations, and we may incur substantial
costs such as security costs to maintain the safety of our personnel. Moreover,
despite these activities, in these locations, we cannot guarantee the safety of
our personnel.





It
can be very difficult or expensive to obtain the insurance we need for our
business operations.





As part
of business operations, we maintain insurance both as a corporate risk
management strategy and in order to satisfy the requirements of many of our
contracts. Insurance products have become increasingly expensive and sometimes
very difficult to obtain. Although we have in the past been generally able to
cover our insurance needs, there can be no assurances that we can secure all
necessary or appropriate insurance in the future.




5




Past
and future environmental, safety and health regulations could impose significant
additional costs on us that reduce our profits.





We are
subject to numerous environmental laws and health and safety regulations. Our
projects can involve the handling of hazardous and other highly regulated
materials which, if improperly handled or disposed of, could subject us to civil
and criminal liabilities. In addition, past activities could also have a
material impact on us.





We
generally do not have long term supply contracts and are subject to price
fluctuations for construction materials.




Our
business is heavily dependent upon construction materials, such as cement,
concrete, glass, and other materials, which we purchase from third-party
suppliers. We could experience shortages of raw materials due to supply,
production or shipment difficulties, which could decrease our ability to supply
housing to our customers. We are also directly affected by increases in the
costs of such raw materials. If we cannot increase prices because of competitive
pressure, increased construction materials costs could reduce our
profits.





If
we experience delays and/or defaults in customer payments, we could suffer
liquidity problems or we could be unable to recover all
expenditures.





Because
of the nature of our contracts, at times we commit resources to projects prior
to receiving payments from the customer in amounts sufficient to cover
expenditures on client projects as they are incurred. Delays in customer
payments may require us to make a working capital investment. If a customer
defaults in making its payments on a project in which we have devoted
significant resources, it could have a material negative effect on our results
of operations.





We
do not plan to pay cash dividends.




Holders
of our common stock are entitled to cash dividends when, as and if declared by
the board of directors out of funds legally available for the payment of
dividends. We have never paid dividends and our management does not anticipate
the declaration or payments of any dividends in the foreseeable future. We
intend to retain earnings, if any, to finance the development and expansion of
our business. Our future dividend policy will be subject to the discretion of
our board of directors and will be contingent upon future earnings, if any, our
financial condition, capital requirements, general business conditions, and
other factors.




Item 1B. Unresolved Staff Comments.




Not
applicable.




Item
2. Properties.




Our
corporate offices in the United States are located at 301 East Pine Street,
Suite 301, Orlando, Florida, which we lease under a lease expiring October,
2009, at a monthly rental of $1,075.  Our corporate offices for our
construction development operations are located at 4 Stroitelnaya St., Bronitsy,
Moscow District, Russia 141070, where we own approximately 1,692 square meters
of office space.  The Company also maintains a sales office in Moscow
under a lease expiring December 31, 2009 at a monthly rental of approximately
$14,000.  We believe that our existing facilities are adequate to
support our existing operations and that, if needed, we will be able to obtain
suitable additional facilities on commercially reasonable terms.




Item
3. Legal Proceedings.




None.




Item
4. Submission of Matters to a Vote of Security Holders.




Not
applicable.




6




PART II




Item
5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer
Purchases of Equity Securities.




Our
shares of common stock are traded on OTCBB under the symbol “PVHI.” The
following table sets forth, for the periods indicated, the high and low bid
prices of our common stock, as reported in published financial
sources.  Quotations reflect inter-dealer prices, without retail
mark-up, mark-down, commission, and may not represent actual
transactions.  All amounts have been adjusted to reflect the one for
thirty reverse stock split effected in August 10, 2007.





Fiscal
      Year Ended December 31, 2009
                                                
                                                High
                                                
                                                
                                                LowQuarter
      ended March 31, 2009
                                                
                                                $
                                                3.48
                                                
                                                
                                                $
                                                2.00Fiscal
      Year Ended December 31, 2008Quarter
      ended December 31, 2008
                                                
                                                $
                                                1.80
                                                
                                                
                                                $
                                                1.00Quarter
      ended September 30, 2008
                                                
                                                
                                                3.50
                                                
                                                
                                                
                                                1.10Quarter
      ended June 30, 2008
                                                
                                                
                                                4.50
                                                
                                                
                                                
                                                1.05Quarter
      ended March 31, 2008
                                                
                                                
                                                5.10
                                                
                                                
                                                
                                                1.75Fiscal
      Year Ended December 31, 2007Quarter
      Ended December 31, 2007
                                                
                                                
                                                2.25
                                                
                                                
                                                
                                                2.25Quarter
      Ended September 30, 2007
                                                
                                                
                                                2.50
                                                
                                                
                                                
                                                2.48Quarter
      Ended June 30, 2007
                                                
                                                
                                                0.06
                                                
                                                
                                                
                                                0.06Quarter
      Ended March 31, 2007
                                                
                                                
                                                0.13
                                                
                                                
                                                
                                                0.13Fiscal
      Year Ended December 31, 2006
                                                
                                                High
                                                
                                                
                                                LowQuarter
      ended December 31, 2006
                                                
                                                
                                                0.97
                                                
                                                
                                                
                                                0.46Quarter
      Ended September 30, 2006
                                                
                                                
                                                1.16
                                                
                                                
                                                
                                                0.59Quarter
      Ended June 30, 2006
                                                
                                                
                                                1.47
                                                
                                                
                                                
                                                1.00Quarter
      Ended March 31, 2006
                                                
                                                
                                                3.00
                                                
                                                
                                                
                                                1.93




Holders




As of
December 1, 2008, there were 425 holders of record of our common
stock.




Dividends




We have
never declared or paid any cash dividends on our common stock, and we do not
anticipate paying cash dividends in the foreseeable future.  Our
current policy is to retain any earnings to finance our future development and
growth.  We may reconsider this policy from time to time in light of
conditions then existing, including our earnings performance, financial
condition and capital requirements.  Any future determination to pay
cash dividends will be at the discretion of our board of directors and will
depend upon our financial condition, operating results, capital requirements,
general business conditions and other factors that our board of directors deems
relevant.




Securities
Authorized for Issuance Under Equity Compensation Plans




We do not
currently have any type of equity compensation plan for our employees, officers
or directors.




7




Item
6. Selected Financial Data.




The
following selected financial data has been derived from our audited financial
statements and should be read in conjunction with such financial statements
included herein.




Year
      Ended December 31,2008
                
                
                2007Statement
      of operations data:Operating
      revenues
                
                $
                89,295,478
                
                
                $
                93,896,791Income
      from operations
                
                
                18,755,553
                
                
                
                10,844,759Net
      Earnings
                
                
                10,491,481
                
                
                
                6,134,950Basic
      and Diluted Earnings per Share
                
                $
                0.45
                
                
                $
                0.30Balance
      sheet data:Total
      assets
                
                $
                48,370,815
                
                
                $
                41,096,454Liabilities—Notes
      Payable
                
                
                18,365,007
                
                
                
                23,255,097




Item
7. Management's Discussion and Analysis or Plan of Operations.




The
following discussion of our financial condition and results of operations should
be read in conjunction with the financial statements and notes thereto and the
other financial information included elsewhere in this
report.  Certain statements contained in this report, including,
without limitation, statements containing the words “believes,” “anticipates,”
“expects” and words of similar import, constitute “forward looking statements”
within the meaning of the Private Securities Litigation Reform Act of
1995.  Such forward-looking statements involve known and unknown risks
and uncertainties.  Our actual results may differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including our ability to create, sustain, manage or forecast our
growth; our ability to attract and retain key personnel; changes in our business
strategy or development plans; competition; business disruptions; adverse
publicity; and international, national and local general economic and market
conditions.





Overview


Throughout
this report, the terms “we,” “us,” “our,” “Promotora Valle Hermoso”, “Promotora”
and “our Company” refer to Promotora Valle Hermoso, Inc., a Colorado
corporation, and, unless the context indicates otherwise, includes our
subsidiaries.




Prior to
August 5, 2008, we were engaged in the housing business in the Republic of
Ecuador.  Effective March 24, 2008, we entered into an Acquisition
Agreement (the “Agreement”) with stockholders of OJSC “494 UNR”,
a  corporation incorporated under the laws of the Russian Federation
(“494 UNR”), providing for the acquisition by the Company of 66.83% of all of
the outstanding shares of common and preferred stock of 494
UNR.   At the closing under the Agreement on August 5, 2008, we
issued 20,500,000 shares of our common stock to the controlling stockholder of
494 UNR. The Agreement provided for resignation at closing of the Company’s
officers and directors and the appointment of new officers and a new Board of
Directors, as well as for the sale of the Company’s existing business to former
management.  We have filed an Information Statement with the
Securities and Exchange Commission to change the name of the Company to UNR
Holdings, Inc. For accounting purposes, the share exchange agreement has been
treated as a recapitalization of 494 UNR (now a 68.83% owned subsidiary of the
Company) as the acquirer. The financial statements prior to August 5, 2008 are
those of 494 UNR.





494 UNR
is a construction and development company with its principal offices located in
Bronnitsy (Moscow region), Russian Federation. 494 UNR operates primarily in the
Moscow region of the Russian Federation and specializes in infrastructure supply
services, and design/build apartment and office buildings and parks, warehouses,
shopping centers and retail facilities, hotels, commercial housing projects and
light industrial projects for governments, developers, businesses and end
users.





8




Recent
Developments





Recent
constraints on the availability of credit in the worldwide banking system and in
the Russian Republic impacted adversely the construction and development
projects of our customers and are projected to have a consequent adverse effect
on our revenues and results of operations.  In addition, the number of
customers for residential units in our projects has decreased because of
decrease in general purchasing power. We do not see any risks in our disposing
of inventory, but the time period for turn over of inventory has
increased.





REVENUES.
Total revenues for the year ended December 31, 2008, decreased to $89.3 million,
or 4.4 %, as compared to $93.4 million during the comparable period of 2007. The
decrease was a result of a significant decrease in road base product
revenues, from $43.0 million to $16.4 million, representing lower demand in the
road/infrastructure construction market  of our road base
product,  offset by an increase in home building revenues, from
$50.1 million to $72.9 million, representing higher sales of apartments from
completed construction projects.





The
Company’s businesses are seasonal. The winter season from December through
February is a period of substantially reduced residential and other construction
projects and road construction activity.





COST OF
SALES. Cost of sales decreased by $13.9 million, or 17.6%, to $65.2
million for the year ended December 31, 2008, from $79.1 million for the
comparable period in 2007. This decrease was primarily due to substantially
lower cost of sales of our road base product.  Cost of sales
of road base products decreased approximately $23.1 million due to the decrease
in demand during 2008.  Cost of sales increased approximately $9.2
million for home building due primarily to an increase in sales of
apartments.  Cost of sales as a % of sales has decreased 14% from 2007
to 2008. The Company attributes this decrease primarily to decreases in building
construction costs allocated to completed sales and higher unit prices of sales
contracts.





SELLING,
GENERAL AND ADMINISTRATIVE COSTS.  Selling, general and administrative
costs increased by approximately $1.4 million , to $5.3 million for the year
ended December 31, 2008 from $3.9 million in 2007. The Company attributes the
increase primarily to the write off and reserve for bad debts of approximately
$1.2 million, increases in payroll costs of approximately of $.5 million, and
other related expenses (professional fees and travel expenses) in connection
with the Company’s SEC compliance obligations, offset in part, by a realized
exchange gain of approximately $1.0 million.





INCOME
FROM OPERATIONS. Income from operations increased by approximately $7.9 million,
from $10.9 million for the year ended December 31, 2007 compared to $18.8
million for the year ended December 31, 2008, primarily due to the increase in
home buildings gross margins offset by decreases in road base product
operations.  Road base product operations contributed approximately
$5.2 million in 2008 compared to $8.7 million in 2007.   Home
building operations contributed $13.5 million in 2008 as compared to an
operating profit of approximately $2.1 million in 2007.





OTHER
INCOME. Other income increased from $1.2 million for the year ended December 31,
2007 to $2.1 million for the year ended December 31, 2008, primarily due to the
increase from net rental income during 2008 from rental agreements entered into
during 2008 in connection with the rental of various buildings and
equipment.





PROVISION
FOR INCOME TAXES.  Provision for income taxes increased from $2.9
million for the year ending December 31, 2007 to $5.2 million for the year
ending December 31, 2008.  The increase in the provision is primarily
attributable to the increase in net income during 2008.





NET
EARNINGS. Net earnings increased by $4.4 million, to $10.5 million for the year
ended December 31, 2008, from $6.1 million for the comparable period in 2007,
primarily due to the Company’s increase in revenues in the home building
segment, a decrease in the cost of sales resulting in higher gross margins in
the home building segment offset by a decrease in revenues from its road base
product segment, and increases in selling, general and administrative
expenses.





Generally,
we expect a slowdown in the housing market in the Russian Federation to extend
from late 2008 through 2009, and do not see a recovery back toward previous
levels in 2007 to 2008 until 2010.  As to our road base product, we
expect a stable level of sales in 2009 as compared with 2008 revenue, although
there is no assurance that this will be the case.  The economic
downturn should not affect this segment to the same extent that it may affect
the Company’s home building segment.





9





Liquidity and Financial
Resources




The
Company had a working capital surplus of approximately $22.2 million and
stockholders’ equity of approximately $14.1 million as of December 31,
2008.  During the year ended December 31, 2008, the Company had net
borrowings of approximately $(3.3) million.  Cash and cash equivalents
increased approximately $9.7 million for the year ended December 31,
2008.  The increase is primarily attributable to $14.4 million from
operating activities (primarily $10.5 million from net earnings) offset, in
part, by payments on borrowings exceeding proceeds from borrowings of
approximately $3.3 million and approximately $0.4 million of purchases of
equipment.





The
Company believes the sources of cash are sufficient to meet the overhead needs
of the Company in 2009 including the liquidation of its short term
debt.  In January and February 2009, the Company liquidated $8.1
million of matured debt.   The Company expects to eliminate debt
of approximately $10.2 million in June 2009 through cash flow from operations.
The Company expects to continue its sales of properties during 2009 but at a
slower pace due to economic conditions. The global crisis should not have a
material effect on outstanding accounts receivable collections based on
collections through the first quarter of 2009. However, to build out and
complete scheduled projects, the Company will require significant additional
financing.





The
sources of liquidity are a broad range of financial institutions in the Russian
Federation, Japan, the United States and Europe, including banks, private equity
funds and investment banks. The Company is also in negotiations with the
government in the Russian Federation for either possible financing or the
construction of additional apartment units for the government. The financial
markets financing the Company’s construction projects have become much more
difficult to obtain with the global liquidity crisis still in
effect.  The Company does not have any firm commitments as of this
date and there is no assurance that the Company will be able to arrange required
financing for its residential and other construction projects.  The
Company may be forced to delay such projects until financing is
obtained.  The Company has arranged financing in the past with these
institutions and believes financing will be obtainable in the near
future.





Critical
Accounting Policies





The
Securities and Exchange Commission recently issued "Financial Reporting Release
No.  60 Cautionary Advice Regarding Disclosure About Critical
Accounting Policies" ("FRR 60"), suggesting companies provide additional
disclosures, discussion and commentary on those accounting policies considered
most critical to its business and financial reporting
requirements.  FRR 60 considers an accounting policy to be critical if
it is important to the Company's financial condition and results of operations,
and requires significant judgment and estimates on the part of management in the
application of the policy.  For a summary of the Company's significant
accounting policies, including the critical accounting policies discussed below,
please refer to the accompanying notes to the financial statements.





The
Company assesses potential impairment of its long-lived assets, which include
its property and equipment and its identifiable intangibles such as deferred
charges under the guidance of SFAS 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets" (“SFAS 144”). The Company must continually
determine if a permanent impairment of its long-lived assets has occurred and
write down the assets to their fair values and charge current operations for the
measured impairment.





Inventories
- Inventories consist of land, land development,  construction costs,
capitalized interest and construction overhead and are stated at cost, net of
impairment losses, if any. Construction costs are accumulated during the period
of construction and charged to cost of sales under specific identification
methods. Land, land development and common facility costs are allocated based on
buildable acres to product types within each construction project, then charged
to cost of sales equally based upon the number of projects to be constructed in
each product type.




The
recoverability of inventories and other long-lived assets are assessed in
accordance with the provisions of SFAS 144, which requires long-lived assets,
including inventories, held for development to be evaluated for impairment based
on undiscounted future cash flows of the assets at the lowest level for
which  there are identifiable cash flows. As such, we evaluate
inventories for impairment at the individual level, the lowest level of discrete
cash flows that we measure.




10




We
evaluate inventories under development for impairment when indicators of
potential impairment are present. Indicators of impairment include, but are not
limited to, decreases in local market values, decreases in gross margins or
sales absorption rates, decreases in net sales prices (base sales price net of
sales incentives), or actual or projected operating or cash flow losses. The
assessment of construction projects for indication of impairment is performed
quarterly, primarily by completing detailed budgets for all of our projects and
identifying those construction projects with a projected operating loss for any
projected fiscal year or for the entire projected life. For those construction
projects with projected losses, we estimate remaining undiscounted future cash
flows and compare those to the carrying value of the project, to determine if
the carrying value of the asset is recoverable. The projected operating profits,
losses or cash flows of each construction project can be significantly impacted
by our estimates of the following:





•
            future
      base selling prices;•
            future
      projects sales incentives;


•
            future  construction
      projects and land development costs; and•
            future
      sales absorption pace and cancellation
rates.




These
estimates are dependent upon specific market conditions for each construction
project. While we consider available information to determine what we believe to
be our best estimates as of the end of a quarterly reporting period, these
estimates are subject to change in future reporting periods as facts and
circumstances change. Local market-specific conditions that may impact our
estimates for a project include:





•
            the
      intensity of competition within a market, including publicly available
      sales prices and sales incentives offered by our
    competitors;•
            the
      current sales absorption pace for both our construction project and
      competitor construction project;


•
            construction
      project specific attributes, such as location, availability of lots in the
      market, desirability and uniqueness of our construction project, and the
      size and style of project currently being offered;•
            potential
      for alternative product offerings to respond to local market
      conditions;


•
            changes
      by management in the sales strategy of the project; and•
            current
      local market economic and demographic conditions and related trends and
      forecasts.




These and
other local market-specific conditions that may be present are considered by
management in preparing projection assumptions for each construction project.
The sales objectives can differ between our projects, even within a given
market. For example, facts and circumstances in a given project may lead us to
price our projects with the objective of yielding a higher sales absorption
pace, while facts and circumstances in another project may lead us to price our
projects to minimize deterioration in our gross margins, although it may result
in a slower sales absorption pace. In addition, the key assumptions included in
our estimate of future undiscounted cash flows may be interrelated. For example,
a decrease in estimated base sales price or an increase in project sales
incentives may result in a corresponding increase in sales absorption pace.
Additionally, a decrease in the average sales price of projects to be sold and
closed in future reporting periods for one project that has not been generating
what management believes to be an adequate sales absorption pace may impact the
estimated cash flow assumptions of a nearby project. Changes in our key
assumptions, including estimated construction and development costs, absorption
pace and selling strategies, could materially impact future cash flow and fair
value estimates. Due to the number of possible scenarios that would result from
various changes in these factors, we do not believe it is possible to develop a
sensitivity analysis with a level of precision that would be meaningful to an
investor.




If the
undiscounted cash flows are more than the carrying value of the project, then
the carrying amount is recoverable, and no impairment adjustment is required.
However, if the undiscounted cash flows are less than the carrying amount, then
the project is deemed impaired and is written-down to its fair value. We
determine the estimated fair value of each project by determining the present
value of the estimated future cash flows at a discount rate commensurate with
the risk of the respective project. Our discount rates used for the impairments
recorded to date range from 13.5% to 17.0%. The estimated future cash flow
assumptions are the same for both our recoverability and fair value assessments.
Should the estimates or expectations used in determining estimated cash flows or
fair value decrease or differ from current estimates in the future, we may be
required to recognize additional impairments related to current and future
projects. The impairment of a project is allocated to each project on a specific
identification basis and written down to each project’s fair
value.  As of December 31, 2008 and 2007, the Company has evaluated
the inventory for possible impairment and determined no adjustments for
impairment existed.  There were no contract cancellations and although
the economic climate may cause a delay in completing construction projects,
there is no current impairment issues that will affect current
operations.




11




Inventories
held for sale, which are land parcels where we have decided not to build a
project, are a very small portion of our total inventories, and are reported at
the lower of carrying amount or fair value less costs to sell. In determining
whether land held for sale is impaired, management considers, among other
things, prices for land in recent comparable sale transactions, market analysis
studies, which include the estimated price a willing buyer would pay for the
land (other than in a forced liquidation sale) and recent bona fide offers
received from outside third parties.




From time
to time, we write-off deposits and approval, engineering and capitalized
interest costs when we decide not to exercise options to buy land in various
locations or when we redesign projects and/or abandon certain engineering costs.
In deciding not to exercise a land option, we take into consideration changes in
market conditions, the timing of required land takedowns, the willingness of
land sellers to modify terms of the land option contract (including timing of
land takedowns), and the availability and best use of our capital, among other
factors. The write-off is recorded in the period it is deemed probable that the
optioned property will not be acquired. In certain instances, we have been able
to recover deposits and other preacquisition costs which were previously written
off. These recoveries are generally not significant in comparison to the total
costs written off.





NEW
FINANCIAL ACCOUNTING STANDARDS


In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, which
enhances existing guidance for measuring assets and liabilities using fair
value.  This Standard provides a single definition of fair value,
together with a framework for measuring it, and requires additional disclosure
about the use of fair value to measure assets and
liabilities.    In February 2008, the FASB issued FASB
Staff Position SFAS 157-1, “Application of SFAS No. 157 to SFAS No. 13 and Its
Related Interpretative Accounting Pronouncements that Address Leasing
Transactions” (“FSP SFAS 157-1”) and FASB Staff Position SFAS 157-2, “Effective
Date of SFAS No. 157” (“FSP SFAS 157-2”). FSP SFAS 157-1 excludes SFAS No.
13 and its related interpretive accounting pronouncements that address leasing
transactions from the requirements of SFAS No. 157, with the exception of fair
value measurements of assets and liabilities recorded as a result of a lease
transaction but measured pursuant to other pronouncements within the scope of
SFAS No. 157. FSP SFAS 157-2 delays the effective date of SFAS No. 157 for
all nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually). FSP SFAS 157-1 and FSP SFAS 157-2 became effective
for the Company upon adoption of SFAS No. 157 on January 1, 2008. See Note 3 of
Notes to Consolidated Financial Statements for disclosures related to the
Company’s financial assets accounted for at fair value on a recurring or
nonrecurring basis.  The Company will provide the additional
disclosures required relating to the fair value measurement of nonfinancial
assets and nonfinancial liabilities when it completes its implementation of SFAS
No. 157 on January 1, 2009, as required, and does not believe they will have a
significant impact on its financial statements.





In
February 2007, the FASB issued SFAS No. 159 (“SFAS 159”) “The Fair Value Option
for Financial Assets and Financial Liabilities”, providing companies with an
option to report selected financial assets and liabilities at fair
value.  The Standard’s objective is to reduce both complexity in
accounting for financial instruments and the volatility in earnings caused by
measuring related assets and liabilities differently.  It also
requires entities to display the fair value of those assets and liabilities for
which the Company has chosen to use fair value on the face of the balance
sheet.  SFAS 159 is effective for fiscal years beginning after
November 15, 2007.  SFAS No. 159 did not have a material impact on its
financial statements.




In
December 2007, the FASB issued SFAS 141(R), which replaces SFAS 141 “Business
Combinations”.  This Statement is intended to improve the relevance,
completeness and representational faithfulness of the information provided in
financial reports about the assets acquired and the liabilities assumed in a
business combination.  This Statement requires an acquirer to
recognize the assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree at the acquisition date, measured at their fair values
as of that date, with limited exceptions specified in the
Statement.  Under SFAS 141(R), acquisition-related costs, including
restructuring costs, must be recognized separately from the acquisition and will
generally be expensed as incurred.  That replaces SFAS 141’s
cost-allocation process, which required the cost of an acquisition to be
allocated to the individual assets acquired and liabilities assumed based on
their estimated fair values.  SFAS 141(R) shall be applied
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual report period beginning on or after
December 15, 2008.  The Company will adopt SFAS No. 141(R) on January
1, 2009, as required, and does not believe it will have a material impact on its
financial statements.




12




In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS No. 162”).  SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the principles
to be used in the preparation of financial statements of nongovernmental
entities that are presented in conformity with generally accepted accounting
principles (GAAP) in the United States.  This Statement is effective
sixty days following the SEC’s approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.”  The
Company is currently evaluating the potential impact, if any, of the adoption of
SFAS No. 162 on its financial statements.





In
December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements - An amendment of ARB No. 51” (“SFAS
160”).  SFAS 160 establishes new accounting and reporting standards
for the non-controlling interest in a subsidiary and for the deconsolidation of
a subsidiary.  Specifically, this statement requires the recognition
of non-controlling interests (minority interest) as equity in the consolidated
financial statements and separate from parent’s equity.  The amount of
net income attributable to the non-controlling interest will be included in
consolidated net income on the face of the income statement.  SFAS 160
clarifies that changes in a parent’s ownership in a subsidiary that does not
result in deconsolidation are equity transactions if the parent retains its
controlling financial interest.  In addition, this statement requires
that a parent recognize a gain or loss in net income when a subsidiary is
deconsolidated.  Such gain or loss will be measured using the fair
value of the non-controlling equity investment of the deconsolidation
date.  SFAS 160 also includes expanded disclosure requirements
regarding the interest of the parent and its non-controlling
interest.  SFAS 160 is effective for fiscal years, and interim periods
other than fiscal years, beginning on or after December 15, 2008.  The
adoption of SFAS 160 will have a material impact on the Company’s Consolidated
Balance Sheet.




Item
7A. Quantitative and Qualitative Disclosures About Market Risk.




We are primarily exposed to foreign
currency risk, interest rate risk and credit risk.





Foreign
Currency Risk - Because our revenues are currently denominated in U.S. dollars,
a strengthening of the dollar could reduce our reported revenues. We do not
engage in financial transactions for trading or speculative
purposes.





Interest
Rate Risk - Interest rate risk refers to fluctuations in the value of a security
resulting from changes in the general level of interest rates. Investments that
are classified as cash and cash equivalents have original maturities of three
months or less.  We believe that there is not a material risk exposure
to our short term investments.





Credit
Risk - Our accounts receivables are subject, in the normal course of business,
to collection risks. We regularly assess these risks and have established
policies and business practices to protect against the adverse effects of
collection risks. As a result we do not anticipate any material losses in this
area.





13




Item
8. Financial Statements and Supplementary Data.

















PROMOTORA
VALLE HERMOSO, INC.


CONSOLIDATED
FINANCIAL STATEMENTS


December
31, 2008 and 2007














14




INDEX
TO FINANCIAL STATEMENTS
  PageReport
      of Independent Registered Public Accounting Firm
                F-1Consolidated
      Balance Sheets at December 31, 2008 and 2007
                F-2Consolidated
      Statements of Operations for the Years Ended December31, 2008 and
      2007
                F-3Consolidated
      Statements of Stockholders’ Equity for the Years Ended
                  December
      31, 2008 and 2007
                F-4Consolidated
      Statement of Cash Flows for the Years Ended December 31, 2008 and
      2007
                F-5-6Notes
      to Consolidated Financial Statements
                F-7-21
      
 15
  REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
 
 Board of
Directors
 Promotora
Valle Hermoso, Inc.
 Moscow
District, Russia
 
 We have
audited the accompanying consolidated balance sheets of Promotora Valle Hermoso,
Inc. and Subsidiary (collectively, the “Company”) as of December 31, 2008 and
2007, and the related Statements of Operations, Stockholders’ Equity and Cash
Flows for each of two years in the period ended December 31,
2008.  These financial statements are the responsibility of the
Company’s management.  Our responsibility is to express an opinion on
these financial statements based on our audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 As
discussed in Note 1 of Notes to Financial Statements, 100% of the assets are
located in the Russian Federation and 100% of the revenue is earned in the
Russian Federation.
 
 In our
opinion, such financial statements present fairly, in all material respects, the
consolidated financial position of the Company as of December 31, 2008 and 2007,
and the results of its operations and its cash flows for each of the two years
in the period ended December 31, 2008, in conformity with accounting principles
generally accepted in the United States of America.
 
 
 
 /s/
Wiener, Goodman & Company, P.C.
 Eatontown,
New Jersey
 April 6,
2009
 
       F-1
  PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARYCONSOLIDATED
      BALANCE SHEETSDecember
      31,2008
                            
                            
                            2007ASSETSCash
      and cash equivalents
                            
                            $
                            16,430,669
                            
                            
                            $
                            6,736,680Inventories
                            
                            
                            21,785,506
                            
                            
                            
                            26,861,997Receivables
      - net of allowance for doubtful accountsof
      $500,000 and $-0-
                            
                            
                            9,310,625
                            
                            
                            
                            6,315,677Property,
      plant and equipment - net
                            
                            
                            678,147
                            
                            
                            
                            983,565Other
      assets
                            
                            
                            165,868
                            
                            
                            
                            198,535TOTAL
      ASSETS
                            
                            $
                            48,370,815
                            
                            
                            $
                            41,096,454LIABILITIES
      AND STOCKHOLDERS' EQUITYNotes
      payable
                            
                            $
                            18,365,007
                            
                            
                            $
                            23,255,097Accounts
      payable and other liabilities
                            
                            
                            957,256
                            
                            
                            
                            3,001,535Deferred
      income taxes
                            
                            
                            6,974,741
                            
                            
                            
                            3,459,820Total
      Liabilities
                            
                            
                            26,297,004
                            
                            
                            
                            29,716,452Minority
      interests
                            
                            
                            8,924,777
                            
                            
                            
                            3,717,499Commitments
      and Contingencies
                            
                            
                            -
                            
                            
                            
                            -Stockholders'
      Equity:Common
      stock, $0.001 par value; authorized 100,000,000shares;
      outstanding 24,464,799 and 20,500,000 shares, respectively
                            
                            
                            24,465
                            
                            
                            
                            20,500Paid-in
      capital
                            
                            
                            99,579
                            
                            
                            
                            99,579Retained
      earnings
                            
                            
                            17,860,837
                            
                            
                            
                            7,373,321Accumulated
      other comprehensive income (loss)
                            
                            
                            (4,835,847
                            )
                            
                            
                            169,103Total
      Stockholders' Equity
                            
                            
                            13,149,034
                            
                            
                            
                            7,662,503TOTAL
      LIABILITIES AND STOCKHOLDERS'EQUITY
                            
                            $
                            48,370,815
                            
                            
                            $
                            41,096,454
 See
notes to consolidated financial statements
  F-2
  PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARYCONSOLIDATED
      STATEMENT OF OPERATIONSFor
      the Years EndedDecember
      31,2008
                              
                              
                              2007Revenues:Home
      building
                              
                              $
                              72,930,202
                              
                              
                              $
                              50,900,066Road
      base product
                              
                              
                              16,365,276
                              
                              
                              
                              42,996,72589,295,478
                              
                              
                              
                              93,896,791Costs
      and expenses:Cost
      of sales
                              
                              
                              65,260,260
                              
                              
                              
                              79,185,231Selling,
      general and administrative costs
                              
                              
                              5,279,665
                              
                              
                              
                              3,866,80170,539,925
                              
                              
                              
                              83,052,032Income
      from operations
                              
                              
                              18,755,553
                              
                              
                              
                              10,844,759Other
      income expense:Other
      income (principally rental income)
                              
                              
                              2,091,404
                              
                              
                              
                              1,234,103Income
      before minority interests andprovision
      for income taxes
                              
                              
                              20,846,957
                              
                              
                              
                              12,078,862Minority
      interests share of earnings ofconsoldiated
      subsidiary - net of taxes
                              
                              
                              5,207,278
                              
                              
                              
                              3,044,985Income
      before provision for income taxes
                              
                              
                              15,639,679
                              
                              
                              
                              9,033,877Provision
      for income taxes
                              
                              
                              5,148,198
                              
                              
                              
                              2,898,927Net
      earnings
                              
                              $
                              10,491,481
                              
                              
                              $
                              6,134,950Earnings
      per common share - basic and diluted
                              
                              $
                              0.45
                              
                              
                              $
                              0.30Weighted
      average common sharesoutstanding
      - basic and diluted
                              
                              
                              23,552,352
                              
                              
                              
                              20,500,000
 See notes to consolidated
financial statements
  F-3
  PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARYCONSOLIDATED
      STATEMENT OF STOCKHOLDERS' EQUITYDECEMBER
      31, 2008AccumulatedOtherCommon
      Stock
                                    
                                    
                                    Paid-In
                                    
                                    
                                    Retained
                                    
                                    
                                    Comprehensive
                                    
                                    
                                    ComprehensiveNo
      of shares
                                    
                                    
                                    Amount
                                    
                                    
                                    Capital
                                    
                                    
                                    Earnings
                                    
                                    
                                    Income
      (Loss)
                                    
                                    
                                    Income
                                    
                                    
                                    TOTALBalance,
      January 1, 2007
                                    
                                    
                                    20,500,000
                                    
                                    
                                    $
                                    20,500
                                    
                                    
                                    $
                                    99,579
                                    
                                    
                                    $
                                    1,238,371
                                    
                                    
                                    $
                                    46,632
                                    
                                    
                                    
                                    
                                    
                                    $
                                    1,405,082Net
      income
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    6,134,950
                                    
                                    
                                    
                                    -
                                    
                                    
                                    $
                                    6,134,950
                                    
                                    
                                    
                                    6,134,950Currency
      translation adjustment
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    122,471
                                    
                                    
                                    
                                    122,471
                                    
                                    
                                    
                                    122,471Comprehensive
      income
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    $
                                    6,257,421Balance,
      December 31, 2007
                                    
                                    
                                    20,500,000
                                    
                                    
                                    
                                    20,500
                                    
                                    
                                    
                                    99,579
                                    
                                    
                                    
                                    7,373,321
                                    
                                    
                                    
                                    169,103
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    7,662,503Effect
      of recapitalization
                                    
                                    
                                    3,964,799
                                    
                                    
                                    
                                    3,965
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (3,965
                                    )
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    -Net
      income
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    10,491,481
                                    
                                    
                                    
                                    -
                                    
                                    
                                    $
                                    10,491,481
                                    
                                    
                                    
                                    10,491,481Currency
      translation adjustment
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (4,009,950
                                    )
                                    
                                    
                                    (4,009,950
                                    )
                                    
                                    
                                    (4,009,950
                                    )Unrealized
      foreign translation (loss)
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (995,000
                                    )
                                    
                                    
                                    (995,000
                                    )
                                    
                                    
                                    (995,000
                                    )Comprehensive
      income
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    $
                                    5,486,531Balance,
      December 31, 2008
                                    
                                    
                                    24,464,799
                                    
                                    
                                    $
                                    24,465
                                    
                                    
                                    $
                                    99,579
                                    
                                    
                                    $
                                    17,860,837
                                    
                                    
                                    $
                                    (4,835,847
                                    )
                                    
                                    
                                    
                                    
                                    
                                    $
                                    13,149,034
 See
notes to consolidated financial statements
  F-4
  PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARYCONSOLIDATED
      STATEMENT OF CASH FLOWSFor
      the Years EndedDecember
      31,2008
                            
                            
                            2007Cash
      flows from operating activities:Net
      income
                            
                            $
                            10,491,481
                            
                            
                            $
                            6,134,950Adjustments
      to reconcile net income to net cashused
      in operating activities:Depreciation
                            
                            
                            64,355
                            
                            
                            
                            74,220Net
      income allocated to minority interests
                            
                            
                            5,207,278
                            
                            
                            
                            3,044,985(Gain)
      loss on sale of property, plant and equipment
                            
                            
                            (124,409
                            )
                            
                            
                            1,386Deferred
      income taxes
                            
                            
                            3,828,921
                            
                            
                            
                            3,014,093Change
      in operating assets and liabilities
                            
                            
                            (5,078,177
                            )
                            
                            
                            (23,552,994
                            )Net
      cash provided by (used in) operating activities
                            
                            
                            14,389,449
                            
                            
                            
                            (11,283,360
                            )Cash
      flows from investing activities:Proceeds
      from sale of property, plant and equipment
                            
                            
                            -
                            
                            
                            
                            8,286Purchase
      of property, plant and equipment
                            
                            
                            (350,105
                            )
                            
                            
                            (709,159
                            )Net
      cash (used in) investing activities
                            
                            
                            (350,105
                            )
                            
                            
                            (700,873
                            )Cash
      flows from financing activities:Proceeds
      from borrowings
                            
                            
                            20,898,496
                            
                            
                            
                            16,246,004Repayment
      of loans
                            
                            
                            (24,135,413
                            )
                            
                            
                            (12,832,944
                            )Net
      cash provided by (used in) financing activities
                            
                            
                            (3,236,917
                            )
                            
                            
                            3,413,060Effect
      of exchange rate changes on cash
                            
                            
                            (1,108,438
                            )
                            
                            
                            (456,659
                            )Net
      increase (decrease) in cash
                            
                            
                            9,693,989
                            
                            
                            
                            (9,027,832
                            )Cash
      - beginning of year
                            
                            
                            6,736,680
                            
                            
                            
                            15,764,512Cash
      - end of year
                            
                            $
                            16,430,669
                            
                            
                            $
                            6,736,680Changes
      in operating assetsand
      liabilities consist of:(Increase)
      decrease in accounts receivable
                            
                            
                            (4,080,948
                            )
                            
                            
                            3,251,721(Increase)
      decrease in inventories
                            
                            
                            1,047,050
                            
                            
                            
                            (27,109,321
                            )Increase
      (decrease) in accounts payable andother
      liabilities
                            
                            
                            (2,044,279
                            )
                            
                            
                            304,606$
                            (5,078,177
                            )
                            
                            $
                            (23,552,994
                            )
 See
notes to consolidated financial statements
  F-5
  PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARYCONSOLIDATED
      STATEMENT OF CASH FLOWS (Continued)For
      the Years EndedDecember
      31,2008
                    
                    
                    2007Supplementary
      Information:Cash
      paid during the year forInterest
                    
                    $
                    2,877,310
                    
                    
                    $
                    1,754,285Income
      taxes
                    
                    $
                    75,020
                    
                    
                    $
                    153,140Non-cash
      investing activities:Services
      received in lieu of proceeds fromthe
      sale of property, plant and equipment
                    
                    $
                    674,932
                    
                    
                    $
                    -
 See
notes to consolidated financial statements
  F-6
  PROMOTORA VALLE HERMOSO, INC. AND
SUBSIDIARY
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
YEARS ENDED DECEMBER 31, 2008 AND 2007
 
 
 1.
              DESCRIPTION
      OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
  POLICIES
 
 Organization
 
 Promotora
Valle Hermoso, Inc. and Subsidiary (“Promotora Valle Hermoso” or the “Company”)
operates its business through its majority-owned subsidiary, 494 UNR Open Joint
Stock, Inc. (“494 UNR”).  494 UNR, a Russian Federation corporation,
is a construction contractor operating in the Russian Federation.  In
addition to the general construction services, the Company develops and
constructs multi-functional, multi-apartment residential complexes and produce
and supply infrastructure projects with a proprietary polyethylene road base
material.
 
 494 UNR
operates primarily in the Moscow region of the Russian Federation and has
completed projects in a number of other cities or urban areas.  All
revenue is earned within the Russian Federation.
 
 Basis
of Presentation
 
 Effective
March 24, 2008, Promotora Valle Hermoso entered into an Acquisition Agreement
with the stockholders of 494 UNR, providing for the acquisition by the Company
of 66.83% of the outstanding shares of common and preferred stock of 494
UNR.  In connection with the final agreement, as of August 5, 2008,
the Company issued 20,500,000 of its common stock to Alexei Ivanovich Kim (the
“Controlling Shareholder”).  Based on the number of outstanding voting
securities as of August 5, 2008, the Controlling Shareholder owns beneficially
approximately 84% of the Company’s issued and outstanding shares of common
stock.  In connection with the share exchange, the Company acquired
the assets and assumed the liabilities of 494 UNR as the
acquirer.  The financial statements prior to August 5, 2008, reflect
the assets and liabilities of 494 UNR at historical carrying
amounts.
 
 Under the
March 24, 2008 Acquisition Agreement providing for the share exchange with the
controlling stockholder of 494 UNR, the former management of Promotora Valle
Hermoso had agreed to assume all debt of Promotora Valle Hermoso in exchange for
the assets of the Company’s former subsidiary, “ Conjunto Habitacional Maria
Paz”. The sale of this subsidiary’s assets to former management was accomplished
by the transfer of the ownership interests in this subsidiary in exchange for
the assumption of approximately $1.0 million of debt of Promotora Valle Hermoso
as of the August 4, 2008 closing date of the sale. The net assets sold in this
transaction were approximately $400,000, representing the net assets of the
Company as shown on its June 30, 2008, unaudited balance sheet included in its
Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission
(“SEC”) on August 11, 2008, reduced by approximately $400,000 for the costs of
uncompleted contracts due to the economic conditions within the construction
industry sector in Ecuador. Following the sale of the existing business to
former management, the Company retained no assets or liabilities attributable to
operations of the parent corporation or operations of the Ecuador subsidiary
prior to the sale of subsidiary’s assets and assumption by prior management of
its liabilities.
  F-7
  The share
exchange was accounted for as a recapitalization.  The financial
statements show a retroactive restatement of the Company’s historical
stockholders’ equity to reflect the equivalent number of shares of common stock
issued in the acquisition.
 
 Effective
August 5, 2008, the Company’s officers and directors resigned and new officers
and a new Board of Directors were appointed, as well as the sale of the
Company’s existing business to former management.
 
 Summary
of Significant Accounting Policies
 
 Principles
of Consolidation
 
 The
financial statements include the accounts of the Company and its majority-owned
subsidiary.  All intercompany transactions and balances have been
eliminated.  Where the Company’s ownership is less than 100 percent,
the minority ownership interests are reported in the Consolidated Balance Sheet
as a liability.  The minority ownership interest of the Company’s
earnings is classified as “Minority interests share of earnings of consolidated
subsidiary” in the consolidated statement of operations.
 
 Economic
and Political Risks
 
 The
Company faces a number of risks and challenges since its operations are in the
Russian Federation
and  its  primary  market  is in the
Russian Federation.  100% of the consolidated revenue is earned in the
Russian Federation and 100% of the assets are located in the Russian
Federation.  Management cannot presently predict what future impact
the political risk will have on the Company, if any, or how the political
climate in the Russian Federation will affect the Company’s
operations.  Accordingly, events resulting from any change in the
political climate could have a material effect on the Company.
  Use
of Estimates
 
 The
preparation of financial statements in conformity with accounting principles
accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those
estimates.
  Revenue
Recognition
  The
Company is primarily engaged in developing several high-rise and mid-rise
buildings and commercial centers that will take more than 12 months to
complete.  If these buildings qualify under accounting principles,
revenues and costs are recognized using the percentage of completion method of
accounting in accordance with Financial Accounting Standards (“SFAS”) No. 66,
“Accounting for Sales of Real Estate” (“SFAS 66”).  Under the
percentage of completion method, revenues and costs are to be recognized when
construction is beyond the preliminary stage, the buyer is committed to the
extent of having a sufficient initial and continuing investments that the buyer
cannot require be refunded except for non-delivery of the apartment, sufficient
apartments in the building have been sold to ensure that the property will not
be converted to rental property, the sales prices are collectible and the
aggregate sales proceeds and the total cost of the building can be reasonably
estimated.
 
 Revenue
from sales of developments that do not meet the percentage of completion
criteria are recognized under the revenue recognition method for completed work
under SFAS 66.  Revenue and costs will be recorded at the time of
completion of apartment construction and delivery to the
buyer.  Revenue is not recognized until the sale is consummated, the
buyer’s initial and continuing investments are adequate to demonstrate a
commitment to pay, the seller’s receivable is not subject to subordination and
the usual risks and rewards of ownership have been transferred to the
buyer.
  F-8
 
 The cash
received on the sale of apartments is recorded as customer advances or progress
payments until the revenue is recognized.  Cash advances at December
31, 2008 and 2007 against future revenue was $61,913,672 and $53,099,782,
respectively, and is included as a contra account and netted against inventory
on the Company’s Consolidated Balance Sheets at December 31, 2008 and
2007.
 
 Revenue
from the sale of materials for road base product is recognized when the work is
completed and accepted by the purchaser in accordance with SOP
81-1.  The contracts are usually of a short duration.  As a
result, the revenue recognized would not differ under the percentage of
completion or the completed-contract method.
 
 Land,
land development and the other common costs, both incurred and estimated to be
incurred in the future, are amortized or allocated to the cost of projects
closed based upon the total number of apartments to be constructed in each
project.  Any changes resulting from a change in the estimated number
of apartments to be constructed or in the estimated costs subsequent to the
commencement of delivery of apartments in the project are allocated to the
remaining undelivered apartments.  Construction and related costs are
charged to the cost of apartments covered under the specific identifiable
method.
 
 The
Company receives a significant amount of cash advances or progress payments from
customers.  Advances received from government agencies are not
refundable but advances received from non-government customers are refundable at
the customer’s request the Company not proceed with the consummation of the
construction.  A customer can receive a refund from a cancelled
contract only if the Company or the customer replaces the contract and the
advance with another customer.
 
 Cash
and Cash Equivalents
  Cash and
cash equivalents include cash deposited in checking accounts, overnight
repurchase agreements and money market funds with maturities of 90 days or less
when purchased.  The cash balances are held at a few institutions and
may, at times, exceed insurable amounts.  The Company believes it
mitigates this risk by depositing cash in major financial
institutions.
 
 Receivables
 
 Accounts
receivable are recorded when the apartments are delivered.  Accounts
receivables are presented in the balance sheet net of allowance for doubtful
accounts.  Receivables are due in 90 days from the date of the invoice
and each customer is evaluated on their ability to demonstrate a commitment to
pay.  Receivables are written off when they are determined to be
uncollectible.  The allowance for doubtful accounts is estimated based
on the Company’s historical losses, the existing economic conditions in the
construction industry, and the financial ability of its
customers.  For the years ended December 31, 2008 and 2007, the
Company recorded bad debt expense of approximately $711,000 and $12,000,
respectively.  In addition, as at December 31, 2008, the Company
established a reserve of $500,000 against future allowances for doubtful
accounts.
  F-9
 
 Inventories
 
 Inventories
held for sale are recorded at the lower of cost or fair value less direct costs
to sell.  Fair value is defined as the amount at which an asset could
be bought or sold in a current transaction between willing parties, that is,
other than in a forced or liquidation sale.  Construction costs are
accumulated during the period of construction and charged to cost of sales under
specific identification methods.  Land, land development and common
facility costs are allocated based on buildable acres to product types within
each project, then charged to cost of sales equally based upon the number of
apartments to be constructed in each product type.  For inventories of
projects under development, a loss is recorded when events and circumstances
indicate impairment and the undiscounted future cash flows generated are less
than the related carrying amounts and estimated cost to complete.  The
impairment loss is the difference between the recorded value of the individual
project, and the discounted future cash flows generated from expected revenue of
the individual project, less the associated cost to complete and direct costs to
sell, which approximates fair value.  The estimates used in the
determination of the estimated cash flows and fair value of a project are based
on factors known to us at the time such estimates are made and our expectations
of future operations.  These estimates of cash flows are significantly
impacted by estimates of the amounts and timing of revenues and costs and other
factors which, in turn, are impacted by local market economic conditions and the
actions of competitors.  Should the estimates or expectations used in
determining estimated cash flows or fair value decrease or differ from current
estimates in the future, we may be required to recognize additional impairments
related to current and future projects.
 
 Post
Development Completion Costs
 
 In
instances where a development is substantially completed and sold and the
Company has additional construction work to be incurred, an estimated liability
is provided to cover the cost of such work and is recorded as cost of sales and
included in accounts payable in the accompanying balance sheet.  Post
development completion costs relate to the Company’s home building
operations.  The nature of these costs would be any additional work
that needs to be completed after the buyer has accepted title to the
property.  Revenue from the sale of the apartment is recorded under
the Company’s revenue recognition policy which is prior to the completion of
additional work.  The additional work to be performed and the amount
invoiced is usually not material to the amount billed to the buyer for the sale
of the apartment.
 
 Fair
Value of Financial Instruments
 
 For
financial instruments, including cash, accounts receivable, accounts payable,
notes payable and accrued expenses, it was assumed that the carrying amount
approximated fair value because of the short maturities of such
instruments.  Management believes that the carrying amount debt is a
reasonable estimate of its fair value.
 
 Concentration
of Credit Risk
 
 Financial
instruments which potentially subject the Company to concentrations of credit
risk consist principally of accounts receivable.  The Company grants
credit to customers that are based on an evaluation of the customer's financial
condition, without requiring collateral.  Exposure to losses on
receivables is principally dependent on each customer's financial
condition.  The Company controls its exposure to credit risk through
credit approvals and progressive payments as the work is preformed.
   The
Company is also subject to the risk of currency fluctuations that may affect the
prices paid for goods and the amounts received for revenue.
  F-10
  Advertising
Costs
 
 Advertising
costs are treated as period costs and expensed as incurred.  During
the year ended December 31, 2008 and 2007, advertising costs expenses were
minimal as advertising costs are incurred by the agency hired by the Company to
market its housing projects.
 
 Interest
 
 In
accordance with SFAS 34, "Capitalization of Interest Cost", interest incurred is
first capitalized to the property under development during the land development
and construction period and expensed along with the associated cost of sales as
the related inventory are sold.   No interest was expensed for the
year ended December 31, 2008 and 2007 as all amounts were capitalized in ongoing
projects that expect to be completed in future periods.  Capitalized
interest is included in Inventories – sold and unsold projects under development
– in the Company’s consolidated balance sheet at December 31, 2008 and
2007.  Interest has been capitalized for the Marchall project, where
the estimated cost of construction is approximately $400 million.  The
Company commenced sales of the Marchall project during the first quarter of 2009
and expects to complete the sales of the apartments in 2009.  The
balance of the commercial portion of the project will not be completed until
2011.  The Marchall project is reviewed for impairment on a quaterly
basis and no inventory or costs related to the project has been impaired as of
December 31, 2008.  The Marchall project consists of the construction
of approximately 19,000 sq, m. of residential apartments, commercial retail
space and the related infrastructure costs.  As of December 31, 2008,
the total capitalized interest on the Marchall project was approximately $8
million.  Interest will be allocated to cost of sales as revenue is
recognized.
 
 Interest
cost incurred, expensed and capitalized were:
  Year
      EndDecember
      31,2008
                      
                      
                      2007Interest
      capitalized at beginning of year
                      
                      $
                      4,465,976
                      
                      
                      $
                      1,993,524Plus
      interest incurred
                      
                      
                      2,038,255
                      
                      
                      
                      2,472,452Less
      cost of sales interest expense
                      
                      
                      -
                      
                      
                      
                      -Less
      other interest expense
                      
                      
                      -
                      
                      
                      
                      -Interest
      capitalized at end of year
                      
                      $
                      6,504,231
                      
                      
                      $
                      4,465,976
 
  Depreciation
 
 Equipment
is stated at cost less accumulated depreciation and
amortization.  Depreciation is calculated primarily using the
straight-line method over their estimated useful lives.
 
 Income
Taxes
 
 The
Company accounts for income taxes using an asset and liability approach under
which deferred income taxes are recognized by applying enacted tax rates
applicable in future years to the differences noted in the financial statement
carrying amounts and the tax basis of the reported assets and
liabilities.
 
 The
principal item giving rise to deferred taxes is expenses deductible for tax
purposes that are not deductible for book purposes.
  F-11
 
 The
Company accounts for income taxes in accordance with the Internal Income Tax Law
of the Russian Federation.  The Company is taxed at a rate of
24%.
 
 Foreign
Currency Translation
 
 The
Russian ruble is the Company’s functional currency and the United States dollar
is the reporting currency.
 
 Conversion
of currency from the Russian ruble into a United States dollar (“US $”) has been
made at the respective applicable rates of exchange.  Monetary assets
and liabilities denominated in foreign currencies are converted into US $ at the
applicable rate of exchange at the balance sheet date.  Income and
expense items are converted at the average rates for the years then
ended.
 
 Earnings
Per Share
 
 Basic
earnings per common share are computed by dividing net earnings by weighted
average number of common shares outstanding during the year.  Diluted
earnings per common share are computed by dividing net earnings by the weighted
average number of common share and potential common shares outstanding during
the year.  There were no potential common shares outstanding for the
years ending December 31, 2008 and 2007.
 
 Advance
payments to Contractors
 
 Advance
payments to Contractors principally include prepayments to subcontractors for
goods and services and which relate to specific housing projects (home building
operations) which are expensed to cost of sales as the applicable inventory are
sold.  The projects typically are one to three years in length and the
subcontractor costs are expensed on a specific project to project
basis.    The payment to subcontractors include prepayments
prior to the work commencing, advance payments for raw materials, and
architectural and engineering services prior to the work being submitted to the
authorities.  All projects are reviewed quarterly for impairment
issues.  If any impairment exists, costs will be written down at that
time.  Advance payments to contractors are included in inventory on
the Company’s consolidated balance sheet at December 31, 2008 and
2007.
 
 Rental
Income
 
 The
Company leases, to third parties, buildings and equipment under operating lease
arrangements for a period of up to one year.  The lease terms usually
begin on January 1 and terminate on December 31 and are renewable on an annual
basis after new negotiations.  Minimum lease revenues are recognized
on a straight-line basis over the minimum lease term.  Lease renewal
periods are considered on a lease-by-lease basis and are generally not included
in the initial lease term.
 
 Reclassifications
 
 Certain
reclassifications have been made to prior period amounts to conform to the
current year presentation, particularly in the detailed disclosures within the
footnote pertaining to Inventories.
  F-12
 
 New
Financial Accounting Standards
 
 In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”, which
enhances existing guidance for measuring assets and liabilities using fair
value.  This Standard provides a single definition of fair value,
together with a framework for measuring it, and requires additional disclosure
about the use of fair value to measure assets and
liabilities.    In February 2008, the FASB issued FASB
Staff Position SFAS 157-1, “Application of SFAS No. 157 to SFAS No. 13 and Its
Related Interpretative Accounting Pronouncements that Address Leasing
Transactions” (“FSP SFAS 157-1”) and FASB Staff Position SFAS 157-2, “Effective
Date of SFAS No. 157” (“FSP SFAS 157-2”). FSP SFAS 157-1 excludes SFAS No.
13 and its related interpretive accounting pronouncements that address leasing
transactions from the requirements of SFAS No. 157, with the exception of fair
value measurements of assets and liabilities recorded as a result of a lease
transaction but measured pursuant to other pronouncements within the scope of
SFAS No. 157. FSP SFAS 157-2 delays the effective date of SFAS No. 157 for
all nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually). FSP SFAS 157-1 and FSP SFAS 157-2 became effective
for the Company upon adoption of SFAS No. 157 on January 1, 2008. See Note 3 of
Notes to Consolidated Financial Statements for disclosures related to the
Company’s financial assets accounted for at fair value on a recurring or
nonrecurring basis.  The Company will provide the additional
disclosures required relating to the fair value measurement of nonfinancial
assets and nonfinancial liabilities when it completes its implementation of SFAS
No. 157 on January 1, 2009, as required, and does not believe they will have a
significant impact on its financial statements.
 
 In
February 2007, the FASB issued SFAS No. 159 (“SFAS 159”) “The Fair Value Option
for Financial Assets and Financial Liabilities”, providing companies with an
option to report selected financial assets and liabilities at fair
value.  The Standard’s objective is to reduce both complexity in
accounting for financial instruments and the volatility in earnings caused by
measuring related assets and liabilities differently.  It also
requires entities to display the fair value of those assets and liabilities for
which the Company has chosen to use fair value on the face of the balance
sheet.  SFAS 159 is effective for fiscal years beginning after
November 15, 2007.  SFAS No. 159 did not have a material impact on its
financial statements.
 
 
 In
December 2007, the FASB issued SFAS 141(R), which replaces SFAS 141 “Business
Combinations”.  This Statement is intended to improve the relevance,
completeness and representational faithfulness of the information provided in
financial reports about the assets acquired and the liabilities assumed in a
business combination.  This Statement requires an acquirer to
recognize the assets acquired, the liabilities assumed, and any noncontrolling
interest in the acquiree at the acquisition date, measured at their fair values
as of that date, with limited exceptions specified in the
Statement.  Under SFAS 141(R), acquisition-related costs, including
restructuring costs, must be recognized separately from the acquisition and will
generally be expensed as incurred.  That replaces SFAS 141’s
cost-allocation process, which required the cost of an acquisition to be
allocated to the individual assets acquired and liabilities assumed based on
their estimated fair values.  SFAS 141(R) shall be applied
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual report period beginning on or after
December 15, 2008.  The Company will adopt SFAS No. 141(R) on January
1, 2009, as required, and does not believe it will have a material impact on its
financial statements.
 
 In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS No. 162”).  SFAS No. 162 identifies the
sources of accounting principles and the framework for selecting the principles
to be used in the preparation of financial statements of nongovernmental
entities that are presented in conformity with generally accepted accounting
principles (GAAP) in the United States.  This Statement is effective
sixty days following the SEC’s approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in
Conformity With Generally Accepted Accounting Principles.”  The
Company is currently evaluating the potential impact, if any, of the adoption of
SFAS No. 162 on its financial statements.
  F-13
 
 In
December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements - An amendment of ARB No. 51” (“SFAS
160”).  SFAS 160 establishes new accounting and reporting standards
for the non-controlling interest in a subsidiary and for the deconsolidation of
a subsidiary.  Specifically, this statement requires the recognition
of non-controlling interests (minority interest) as equity in the consolidated
financial statements and separate from parent’s equity.  The amount of
net income attributable to the non-controlling interest will be included in
consolidated net income on the face of the income statement.  SFAS 160
clarifies that changes in a parent’s ownership in a subsidiary that does not
result in deconsolidation are equity transactions if the parent retains its
controlling financial interest.  In addition, this statement requires
that a parent recognize a gain or loss in net income when a subsidiary is
deconsolidated.  Such gain or loss will be measured using the fair
value of the non-controlling equity investment of the deconsolidation
date.  SFAS 160 also includes expanded disclosure requirements
regarding the interest of the parent and its non-controlling
interest.  SFAS 160 is effective for fiscal years, and interim periods
other than fiscal years, beginning on or after December 15, 2008.  The
adoption of SFAS 160 will have a material impact on the Company’s Consolidated
Balance Sheet.
 
 
 2.  
Property
  Property,
plant and equipment consists of buildings, building improvements, furniture and
equipment used in the ordinary course of business and are recorded at cost less
accumulated depreciation.  Accumulated depreciation related to these
assets at December 31, 2008 and 2007 amounted to $173,261 and $196,170,
respectively.
 
 Depreciation
expense for the years ended December 31, 2008 and 2007 amounted to $64,355 and
$74,220, respectively.
  Classification
                    
                    Expected Useful LivesBuildings
      and building improvements
                    
                    7-30
      yearsTransportation
      equipment
                    
                    5-15
      yearsEquipment
                    
                    5-10
      years
 3.   Inventories
 
 In
accordance with Financial Accounting Standards No. 144, “Accounting for the
Impairment of or Disposal of Long Lived Assets” (“SFAS 144”), the Company
records impairment losses on inventory related to projects under development
when events and circumstances indicate that they may be impaired and the
undiscounted cash flows estimated by these assets are less than their related
carrying amounts.  The Company recorded no impairments for the years
ended December 31, 2008 and 2007.
  F-14
 
 As of
December 31, 2008 and 2007, inventory consists of the following:
 
  December
      31,2008
                      
                      
                      2007Unsold
      projects under development
                      
                      
                      71,330,736
                      
                      
                      
                      63,955,124.Raw
      materials - home building
                      
                      
                      380,517
                      
                      
                      
                      343,144-
      road base product
                      
                      
                      1,989,155
                      
                      
                      
                      2,660,855Advance
      payments to contractors
                      
                      
                      9,998,770
                      
                      
                      
                      13,002,65683,699,178
                      
                      
                      
                      79,961,779Less:
      Progress payments and advances
                      
                      
                      61,913,672
                      
                      
                      
                      53,099,782$
                      21,785,506
                      
                      
                      $
                      26,861,997
 
 F-15
 
 4.   Notes
Payable
 
 Notes
payable balances as of December 31, 2008 and 2007 were as follows:
  December
      31,2008
                                                  
                                                  
                                                  2007Note
      payable to OJSC Ros Der Bank,
                                                  
                                                  $
                                                  8,103,614
                                                  
                                                  
                                                  $
                                                  2,400,000interest
      @ 14%, due November 18, 2008and
      extended to February 2009.  The notewas
      repaid in full in February 2009. (b)Note
      payable to OJSC Siberbank of RF,
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  6,829,092interest
      @ 14%, matured February 20, 2008Note
      payable to OJSC Siberbank of RF,
                                                  
                                                  
                                                  10,210,889
                                                  
                                                  
                                                  
                                                  -interest
      @ 12.75%, due June 2009Notes
      payable to Dunchoille Holdings Limited,
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  14,026,005interest
      @ 10% due December 31, 2007.The
      notes were paid in full in July 2008.Interest
      in the amount of $718,167 hasbeen
      earned as of December 31, 2007 (a)Note
      payable to officer, interest free,due
      on demand
                                                  
                                                  
                                                  50,504
                                                  
                                                  
                                                  
                                                  -$
                                                  18,365,007
                                                  
                                                  
                                                  $
                                                  23,255,097
 The
following table shows the maturities by year of the total amount of notes
payable at December 31, 2008:
  Year
      ending December 31, 2009
                      
                      
                      $
                      18,365,007
  
 The notes
payable are collateralized by the Company’s accounts receivable and current
projects under construction.  The loan agreements contain no debt
covenants or required ratios that need to be maintained.  There are
penalties or increases in the interest rates for a delay in payments, which can
be as high as 21%.
 
 Interest
expense for the years ended December 31, 2008 and 2007 in the amount of
$2,038,255 and $2,472,452, respectively has been capitalized and included in the
cost of sold and unsold projects under development in the Company’s balance
sheet at December 31, 2008 and 2007.
 
 (a) In
July 2008, the notes payable to Dunchoille Holdings Limited was paid in full on
the maturity date of the agreement.  The note was payable in US
dollars and due to the strength of the Ruble compared to the US dollar, a
realized exchange gain in the amount of approximately $1.5 million was recorded
in the Consolidated Statement of Operations and included in administrative
expenses during the year ended December 31, 2008 upon liquidation of the notes
reflecting the difference in exchange rates when the note proceeds was received
and the exchange rates at maturity.
 
 (b) In
November and December 2008, the Company made partial payments to OJSC Ros Der
Bank.  The note payable was payable in US dollars and due to the
strength of the US dollar compared to the Ruble a realized exchange loss in the
amount of approximately $450,000 was recorded in the Consolidated Statement of
Operations and included in administrative expenses during the year ended
December 31, 2008 upon partial liquidation of the notes reflecting the
difference in exchange rates when the note proceeds were received and the
exchange rates of maturity.
  F-16
 
 As of
December 31, 2008, the Company has recorded an unrealized foreign translation
loss in the amount of  $1,309,000.  The amount is included
in accumulated other comprehensive income (loss) on the Company’s Consolidated
Balance Sheet.
 
 5. 
 Income Taxes
 
 The
Company adopted the provision of Financial Accounting Standards Board
Interpretation No. 48, “Accounting for Uncertainties in Income Taxes” (“FIN
48”), on January 1, 2007.  As a result of the implementation of FIN
48, the Company recognized no adjustment in the net liabilities or equity for
unrecognized income tax benefit.  The Company believes there are no
potential uncertain tax positions and all tax returns are correct as
filed.  Should the Company recognize a liability for uncertain tax
positions, the Company will separately recognize the liability for uncertain tax
positions on its balance sheet.  Included in any liability for
uncertain tax positions, the Company will also setup a liability for interest
and penalties.  The Company’s policy is to recognize interest and
penalties related to uncertain tax positions as a component of the current
provision for income taxes.
 
 The
provision for income taxes consists of the following:
   December
      31,2008
                        
                        
                        2007Current:Federal
                        
                        $
                        -
                        
                        
                        $
                        -Foreign
                        
                        
                        75,020
                        
                        
                        
                        43,92175,020
                        
                        
                        
                        43,921Deferred:Federal
                        
                        
                        -
                        
                        
                        
                        -Foreign
                        
                        
                        5,073,178
                        
                        
                        
                        2,855,0065,073,178
                        
                        
                        
                        2,855,006$
                        5,148,198
                        
                        
                        $
                        2,898,927
  A reconciliation of taxes
on income computed at the federal statutory rate to amounts provided is as
follows:
  December
      31,2008
                  
                  
                  2007Tax
      provision (benefit) computed atthe
      federal statutory rate of 34%
                  
                  $
                  7,087,965
                  
                  
                  $
                  4,106,813Decrease
      in taxes resulting from differenttax
      rates and permanent differencesapplicable
      to foreign operations
                  
                  
                  (1,939,767
                  )
                  
                  
                  (1,207,886
                  )$
                  5,148,198
                  
                  
                  $
                  2,898,927
   F-17
  Components of deferred tax
liabilities are as follows:
  December
      31,2008
                      
                      
                      2007Tax Effect
                      
                      
                      Tax EffectDeferred
      Tax Liabilities - CurrentIncome
      on books not reflected on tax returns
                      
                      $
                      6,974,741
                      
                      
                      $
                      3,459,820
 It is
management’s intention to permanently reinvest the majority of the earnings of
its foreign subsidiaries in the expansion of its foreign
operations.  No earnings were repatriated in 2008 or
2007.  Unrepatriated earnings, upon which U.S. income taxes have not
been accrued, are approximately $17.9 million at December 31,
2008.  Such unrepatriated earnings are deemed by management to be
permanently reinvested.  Estimated income taxes related to
unrepatriated foreign earnings are approximately $1.8 million under the current
tax law, which is net of a foreign tax credit of 24%.
 
 The
Company files income tax returns in all jurisdictions in which it has reason to
believe it is subject to tax.  The Company is subject to examination
by various taxing jurisdictions.  To date, none of these examinations
has resulted in any material additional tax.  Nonetheless, any tax
jurisdiction may contend that a filing position claimed by the Company regarding
one or more of its transactions is contrary to that jurisdictions laws or
regulations.  Significant judgement is required in determining the
worldwide provisions for income taxes.  In the ordinary course of
business of a global business, the ultimate tax outcome is uncertain for many
transactions.  It is the Company’s policy to establish provisions for
taxes that may become payable in future years as a result of an examination by
tax authorities.  The Company establishes the provisions based upon
management’s assessment of exposure associated with permanent tax differences
and tax credits applied to temporary difference adjustments.  The tax
provisions are analyzed periodically (at least quarterly) and adjustments are
made as events occur that warrant adjustments to those provisions.
 
 6.
Minority Interest
 
 The
minority interest represents the third parties of 494 UNR who did not exchange
their shares with the Company in connection with the share exchange
agreement.
 
 The
following table sets forth the minority interest balances and the changes in
these balances attributable to the third party investors’
interests:
  2008
                      
                      
                      2007Balance
      at beginning of year
                      
                      $
                      3,717,499
                      
                      
                      $
                      672,514Minority
      interest share of income
                      
                      
                      5,207,278
                      
                      
                      
                      3,044,985Balance
      at end of year
                      
                      $
                      8,924,777
                      
                      
                      $
                      3,717,499
 
 F-18
 7.  
Segment Information
 
 The
Company operates in one industry with two reportable segments.  The
segments are home building and road base product.  The primary
criteria by which financial performance is evaluated and resources are allocated
are revenues and operating income.  The following is a summary of key
financial data:
  2008
                              
                              
                              2007Net
      sales:Home
      building
                              
                              $
                              72,930,202
                              
                              
                              $
                              50,900,066Road
      base product
                              
                              
                              16,365,276
                              
                              
                              
                              42,996,725$
                              89,295,478
                              
                              
                              $
                              93,896,791Income
      from operations:Home
      building
                              
                              $
                              13,530,176
                              
                              
                              $
                              2,098,038Road
      base product
                              
                              
                              5,225,377
                              
                              
                              
                              8,746,721$
                              18,755,553
                              
                              
                              $
                              10,844,759Capital
      expenditures:Home
      building
                              
                              $
                              350,105
                              
                              
                              $
                              107,112Road
      base product
                              
                              
                              -
                              
                              
                              
                              -$
                              350,105
                              
                              
                              $
                              107,112(1)
      Does not include capital expenditures of $602,047in
      2007 relating to rental properties.Depreciation
      expense:Home
      building
                              
                              $
                              47,259
                              
                              
                              $
                              16,272Road
      base product
                              
                              
                              -
                              
                              
                              
                              -$
                              47,259
                              
                              
                              $
                              16,272(2)
      Does not include depreciation expense of $17,096in
      2008 and $57,948 in 2007 relating to rental properties.
  December
      31,2008
                        
                        
                        2007Total
      Assets:Home
      buildings
                        
                        $
                        46,381,660
                        
                        
                        $
                        38,435,599Road
      base products
                        
                        
                        1,989,155
                        
                        
                        
                        2,660,855Total
      Assets
                        
                        $
                        48,370,815
                        
                        
                        $
                        41,096,454
 The
Company had sales to one customer in excess of ten percent of consolidated net
sales in 2008.  The amount and percentages of the Company’s sales to
this customer in 2008 was $13.1 million (14.7%).  Management believes
the loss of this customer could have a material adverse effect on the Company’s
consolidated results of operations, financial position and cash
flows.
 
 8.
Commitments and Contingencies
 
 a) The
Company leases various office facilities.  Some of these leases
require the Company to pay certain executory costs (such as maintenance and
insurance).  The leases contain no escalation clauses or capital
improvement funding provisions.
  F-19
 
 Future
minimum lease payments for operating leases are approximately as
follows:
 
  Year
      Ending2009
                        
                        $
                        168,5642010
                        
                        
                        -2011
                        
                        
                        -Thereafter
                        
                        
                        -$
                        168,564
 
 Rent
expense was $152,014 and $186,265 for the years ended December 31, 2008 and
2007, respectively.
 
 b) The
Company leases, to third parties, buildings and equipment under operating lease
arrangements for a period of up to one year.
 
 The
components of the balance sheet of the rental income are as
follows:
  December
      31,2008
                      
                      
                      2007Property
                      
                      $
                      227,405
                      
                      
                      $
                      826,735Less:
      Accumulated depreciation
                      
                      
                      142,410
                      
                      
                      
                      125,314$
                      84,995
                      
                      
                      $
                      701,421
 Schedule
of Components of Net Rental Income
  2008
                      
                      
                      2007Total
      rental income
                      
                      $
                      4,119,484
                      
                      
                      $
                      3,304,772Rental
      expenses
                      
                      
                      2,152,492
                      
                      
                      
                      2,137,113Net
      rental income
                      
                      $
                      1,966,992
                      
                      
                      $
                      1,167,659
  Schedule
of Minimum Rental Income Payments
  Year
      EndedDecember 31,2009
                              
                              $
                              2,911,862
  Schedule
of Minimum Rental Expense Payments
  Year
      EndedDecember 31,2009
                                  
                                  $
                                  1,984,523
 
 F-20
 
 9.  
Accumulated Other Comprehensive Income (Loss)
  The
components of accumulated other comprehensive income (loss) as of December 31,
2008 and 2007 are summarized below:
 
 2008
                                
                                
                                2007Foreign
      currency translation
                                
                                $
                                (3,840,847
                                )
                                
                                $
                                887,270adjustmentUnrealized
      foreign translation loss on note
                                
                                
                                (995,000
                                )
                                
                                
                                -payable
      related to SFAS No. 130, net of taxesof
      $314,000 as of December 31, 2008$
                                (4,835,847
                                )
                                
                                $
                                887,270


F-21




Item
9. Changes In and Disagreements With Accountants on Accounting and Financial
Disclosure.




None.




Item 9A (T). Controls and Procedures.





As
supervised by our board of directors and our principal executive and principal
financial officers, management has established a system of disclosure controls
and procedures and has evaluated the effectiveness of that
system.  The system and its evaluation are reported on in the below
Management's Annual Report on Internal Control over Financial
Reporting.  Our principal executive and financial officer has
concluded that our disclosure controls and procedures (as defined in the 1934
Securities Exchange Act Rule 13a-15(e)) as of December 31, 2008, are effective,
based on the evaluation of these controls and procedures required by paragraph
(b) of Rule 13a-15.





Management's
Annual Report on Internal Control over Financial Reporting





Management
is responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of
the Securities Exchange Act of 1934 (the "Exchange Act").  Internal
control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with U.S. generally
accepted accounting principles.





Management
assessed the effectiveness of internal control over financial reporting as of
December 31, 2008. We carried out this assessment using the criteria of the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control—Integrated Framework.





This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.  Management's report was not subject to attestation by our
registered public accounting firm, pursuant to temporary rules of the Securities
and Exchange Commission that permit us to provide only management's report in
this annual report.  Management concluded in this assessment that as
of December 31, 2008, our internal control over financial reporting is
effective.





There
have been no significant changes in our internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
during the fourth quarter of 2008 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.




Item
9B. Other Information.




None.




16




PART
III




Item
10. Directors, Executive Officers, and Corporate Governance.




The
following table and text set forth the names and ages of all directors and
executive officers of the Company as of March 1, 2009.  The Board of
Directors is comprised of only one class.  All of the directors will
serve until the next annual meeting of stockholders and until their successors
are elected and qualified, or until their earlier death, retirement, resignation
or removal.  Officers are elected at the Annual Meeting of the Board
of Directors, which immediately follows the Annual Meeting of
Stockholders.





There are
no family relationships among directors and executive officers, except that
Alexei A. Kim is the son of Alexei I. Kim.





Name
                    Age
                    Position
      with CompanyAlexei
      Ivanovich Kim
                    60
                    Chairman
      of the Board of Directors and PresidentAlexei
      Alexeivich Kim
                    36
                    Chief
      Executive Officer and DirectorIuriy
      Vladimirivich Shevchenko
                    37
                    Chief
      Financial Officer, Secretary and DirectorSergey
      Petrovich Yushkevich
                    42
                    Chief
      Accounting Officer and DirectorAndrey
      Andreevich Nikolaychuk
                    48
                    DirectorGalina
      Nikolayevna Pyatysheva
                    52
                    DirectorVictor
      Vladimirovich Milukov
                    48
                    DirectorStefan
      C. Mancas
                    31
                    DirectorViorel
      B. Sareboune
                    35
                    Director




Background
of Officers and Directors




The
following is a brief account of the education and business experience during at
least the past five years of each director, executive officer and key employee,
indicating the principal occupation during that period, and the name and
principal business of the organization in which such occupation and employment
were carried out.




Mr.
Alexei Ivanovich Kim, age 60, our Chairman of the Board and President, graduated
from Frunze Polytechnical Institute in engineering and is an Honoured Builder of
Russian Federation. He held executive positions at enterprises in the
construction sector and was awarded several times by Russian Federation and
Moscow authorities for merit in this sector. Mr. A.I. Kim has been General
Director of 494 UNR from 1997 to the present. He led the company from the small
enterprise to a much larger company which took part in large-scale construction
projects including building and maintaining roads and building commercial and
residential buildings.





Alexei A.
Kim, age 36, our Chief Executive Officer, graduated from West Bohemian
University, has been the deputy Chief Accounting Officer of 494 UNR from 1999 to
2005, and has co-managed all key 494 UNR projects. From 2005 to 2006, Mr. A.A.
Kim was marketing director LLC 494 UNR-INVEST, where he developed strategy and
vision, oversaw the business operations and marketing, and developed and
implemented advertising policy and public relations. Commencing in 2006, Mr.
A.A. Kim has been a vice-president of 494 UNR, co-managing all 494 UNR projects,
enhancing business infrastructure and corporate management.





17




Mr. Iuriy
Vladimirivich Shevchenko, age 37, our Chief Financial Officer, graduated with
honors from the Yaroslav Military Finance School. From 1992 to 1995, he worked
as chief accountant and financial department chief at 494 UNR. From 1995
to 1997, he was the chief accountant and assistant chief for the financial and
economic planning and was in charge of the implementation of the company’s
financial strategy and investment effectiveness analysis. From 1997 to 1998 at
494 UNR, he was the deputy chief of the financial and economic planning
department and supervised the financial data and planning discipline. From 1998
to the present, Mr. Shevchenko has been the deputy director general of the
financial and economic planning department at 494 UNR, in charge of financial
resources management, with responsibility for negotiating with commercial banks
and financial institutions, and supervises the development of the company’s
credit policies and asset management and preparation of the financial statements
for 494 UNR.





Sergei P.
Yushkevich, age 42, our Chief Accounting Officer and
Secretary graduated from Sverdlovsk Ural Polytechnic Institute. In 2003, he
graduated from the Moscow Military Institute for Federal Border Patrol
Services.  Mr. Yushkevich started his work experience in 1982 at the
Ordzhonekidze Plant, where he was in charge of diagnosis and tuning radio
electric equipment. From 1983 until 1988, he worked at the Urals Mechanic Plant,
where he was in charge of testing and controlling of the radio electric
equipment tuning. During 1989 to 1992, Mr. Yushkevich worked as a construction
engineer at the All-Union Automatics Scientific Research Institute. He was
responsible for the development and implementation of new standards for radio
electric equipment and certification of the new materials and developed new
software programs for automatic quality control systems. From 1994 to 1996, he
worked at the UNR 1054 as an accountant and later as the chief accountant. Since
1996 to present he has been the deputy chief accountant at 494 UNR.





Andrey
Andreevich Nikolaychuk, age 48, graduated from the Military Logistics Academy,
Volsk, Russian Federation.  From 1989 to 2001 Mr. Nikolaychuk worked
in the commodity management department of the Russian Federation Government,
with more than 10 years' management experience in organizational leadership and
relationship building with partner organizations and team
members.  From 2001 to 2004, he was the Assistant to Executive
Director, Material and Technical Support for LLC “STROY SERVICE #1”, a commodity
managment company located in the Moscow area, where he managed large-scale
implementation logistics projects for new scheduling, inventory and reporting
for the company and planned and structured resources required to sustain growth
of the company’s client base.  From 2004 to 2005, he was the Executive
Director of LLC “STORY SERVICE #1”, a Moscow area commodity management company,
where he was responsible for long-term relationships with clients, maintaining
ongoing communication and facilitating solutions in logistics
chains.  From 2005 to the present, Mr. Andreevich has been the
Executive Director of LLC “SPECSERVICE”, a commodity managment company located
in Moscow area, where he supervises an  administrative and technical
staff of 165 employees and develops corporate policies and
procedures.





Galina
Nikolayevna Pyatysheva, age 52, graduated from the Moscow Institute of Soviet
Trade. From 1981 to 1991, she worked at ZSK Prodsnab Management, Ministry of
Trade, in Zyryanovsk City, Eastern Kazakhstan, as Commodity Director, where she
managed commodity and other supply operations, and from 1991 to 1999, she worked
as a consultant and managing director in setting up retail commercial networks
for “Perekrestok”, “Kopeyka”, located in Sochi, Russian Federation. From 2000 –
2004, Ms. Nikolayevna was a managing director Sibir Airlines (now S7 Airlines),
in Sochi, where she opened a customer service center facility and managed ticket
sales, boarding supervision and customer service, including dealing with
customer complaints.  From 2004 to the present, she has been the
Assistant Director of LLC “BARCODE”, a retail commercial fashion clothes network
in Moscow, where she supervises Financial and Strategic Planning P&L
Management, Auditing and Compliance, Operating and Working Capital, Budget
Development and Management, Cash Flow Management and Modeling .





Victor
Vladimirovich Milukov, age 48, graduated from the Kursk Polytechnic Institute,
and has taken additional courses at RHR International Ecopsi, Russian
Federation, in management, business cooperation, corporate planning and
budgeting.  From 1997 to 2003, Mr. Vladimirovich was the technical
director for San Interbrue-Kursk Beer company, Kursk, Russian Federation. From
2003 to 2004, he was the commercial director for OJSC Kurskagropromtrans, a
logistics company, located in Kursk, and from 2004 to 2006 he was technical
director for LLC Aqua-Don, Rostov, a mineral water producing company. From 2006
to the present, he has been the executive director of LLS Main Project
Investment Bogorodsk, a production company located in Moscow area.




18




Stefan C.
Mancas, age 31, received a Ph.D. degree in Applied Mathematics in 2007, a Master
of Science in Applied Mathematics in 2003 and a Bachelor of Science in
Mathematics/Physics Aerospace Engineering in 2002 from the University of Central
Florida, Orlando, Florida.  He graduated from the Alexandru Ioan Cuza
Military College in Constantza Romania, with a Baccalaureate Diploma—Summa Cum
Laude in 1995.  From August 2007 to the present, Mr. Mancas has been
an Assistant Professor in the Department of Mathematics, Embry-Riddle
Aeronautical University, Daytona Beach, Florida, and from August 2002 to the
present has also been a graduate teaching associate in the Department of
Mathematics, University of Central Florida, Orlando, Florida.  From
June 2007 to August 2007 was an adjunct Professor in the Department of
Mathematics, University of Central Florida, Orlando, Florida, and from January
2007 to August 2007 was an Adjunct Professor in the Department of Mathematics,
Valencia Community College, East Campus, Orlando, Florida.




Viorel B.
Sareboune, 35, received Bachelor of Arts and Master of Arts degrees in 1994 and
1997, respectively, from Moldova State University, Moldova, specializing in arts
and civil and international law.  He received a Master of Business
Administration in 2001, and a Master of Science in Accounting in 2005, from the
University of Central Florida, Orlando, Florida.  Since December 2007,
Mr. Sareboune has been the Vice President Finance and New Business Development
for  Life Extension Nutrition Center, Maitland,
Florida.  From November 2005 to November 2007, Mr. Sareboune was
employed as a tax associate for CNL Hotel and Resorts Inc., Orlando, Florida,
and also from November 2005 to June 2006, he was a business and financial
planning consultant with EDIS Secure LLP, Orlando, Florida.  From
September 2003 to October 2005, Mr. Sareboune was the corporate accountant for
CNLR (NNN) and CNL Hospitality Corp., Orlando, Florida.




Involvement
in Certain Legal Proceedings.





Except as
stated below, during the past five years, no director, person nominated to
become a director, executive officer, promoter or control person of our
Company:





(1)
was a general partner or executive officer of any business against which any
bankruptcy petition was filed, either at the time of the bankruptcy or two years
prior to that time;





(2)
was convicted in a criminal proceeding or named subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses);





(3)
was subject to any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting his involvement
in any type of business, securities or banking activities; or





(4)
was found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended or vacated.





Compliance
with Section 16(a) of the Securities Exchange Act of 1934, as
amended.





Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's
directors and executive officers and persons who own more than 10% of a
registered class of the Company's equity securities to file various reports with
the Securities and Exchange Commission concerning their holdings of, and
transactions in, securities of the Company.  Copies of these filings
must be furnished to the Company.





Mr.
Alexey I. Kim, our Chairman of the Board and President, was required to file a
Form 3 on August 15, 2008, which form was filed on March 10, 2009; similarly,
Messrs. Alexey A. Kim, Chief Executive Officer and director, Iuriy Vladimirovich
Shevchenko, Chief Financial Officer and Director, and Sergey Yushkevich
Petrovich, Chief Accounting Officer and director, were required to file Form 3’s
on August 31, 2008, which forms were filed on March 10, 2009; and Mr. Andrey
Andreevich Nikolaychuk, Ms. Galina Nikolayevna Pyatysheva, Mr. Victor
Vladimirovich Milukov, Mr. Stefan C. Mancas and Mr. Viorel B. Sareboune, all
directors, were required to file Form 3’s on October 27, 2008, which forms were
filed on March 10, 2009.




19




Corporate
Governance




Our Board
of Directors has determined that Viorel Saraboune, Stafan Mancas, Galina
Pyatysheva, Andrey Andreevich Nikolaychuk and Victor Vladimirovich Milukov, a
majority of our Board of Directors, are independent as defined by the NYSE
Rules.




Committees
of our Board of Directors





Audit Committee. Our
Board of Directors has established an Audit Committee, the current members of
which are Viorel Saraboune, Stafan Mancas and Galina Pyatysheva. Each
member of the Audit Committee has been determined to be independent under the
standards for independence for audit committee members established by the NYSE.
In addition, the Board of Directors has determined that each member of the
Committee is financially literate and that Viorel Saraboune qualifies as an
“audit committee financial expert” under the definition promulgated by the SEC.
The Audit Committee reviews our accounting, auditing, financial reporting, and
internal control functions and selects our independent auditors. The Audit
Committee will operate under a written charter, which is under review at this
time.





The audit
committee’s primary responsibility is to assist the Board in its oversight of
the integrity of the Company’s financial reporting process and systems of
internal control, to evaluate the independence and performance of the
Corporation’s independent registered public accounting firm, Wiener, Goodman
& Company, P.C. (“Wiener Goodman”), and internal audit functions and to
encourage private communication between the audit committee and Wiener Goodman
and the internal auditors.




The audit
committee met on March 30, 2009. In discharging its responsibility, initially
the audit committee reviewed and discussed the audited financial statements
for fiscal year 2008 with management and Wiener Goodman, including the matters
required to be discussed by Statement on Auditing Standards (SAS) No. 61,
Communication with Audit Committees.




In
addition, the audit committee received the written disclosures and the letter
from Wiener Goodman required by applicable requirements of the Public Company
Accounting Oversight Board regarding Wiener Goodman’s communications with the
audit committee concerning independence. The audit committee further discussed
with Wiener Goodman the issue of its independence from the Company, and made a
determination to recommend to our Board of Directors to include of the audited
consolidated financial statements in this Annual Report on Form 10-K for the
year ended December 31, 2008.





The audit
committee also will negotiate the hiring of Wiener Goodman for the 2009 audit
and pre-approve all fees which SEC rules require the committee to approve to
ensure that the work to be performed will be permissible under applicable
standards and would not impair Wiener Goodman’s independence.




Other Committees. The
Board does not have standing compensation or nominating committees. The Board
does not believe a compensation or nominating committee is necessary based on
the size of the Company, the current levels of compensation to corporate
officers and the beneficial ownership by Alexei I. Kim of more than 80% of the
Company’s outstanding common stock. The Board will consider establishing
compensation and nominating committees at the appropriate time.





The
entire Board of Directors participates in the consideration of compensation
issues and of director nominees. To date, the Board of Directors has not
formally established any criteria for Board membership. Candidates for director
nominees are reviewed in the context of the current composition of the Board,
the Company’s operating requirements and the long-term interests of its
stockholders. In conducting this assessment, the Board of Directors considers
skills, diversity, age, and such other factors as it deems appropriate given the
current needs of the Board and the Company, to maintain a balance of knowledge,
experience and capability. In particular, weight is given to experience relevant
to the Company’s operations in the Russian Federation and familiarity with
international business issues.





The
Board’s process for identifying and evaluating nominees for director, including
nominees recommended by stockholders, involves compiling names of potentially
eligible candidates, conducting background and reference checks, conducting
interviews with the candidate and others (as schedules permit), meeting to
consider and approve the final candidates and, as appropriate, preparing an
analysis with regard to particular recommended candidates.





20




Stockholder
Communications




The Board
has not established a formal process for stockholders to send communications,
including director nominations, to the Board; however, the names of all
directors are available to stockholders in this Information Statement. Any
stockholder may send a communication to any member of the Board of Directors, in
care of the Company, at 301 East Pine Street, Suite 150, Orlando, FL 32801
(Attention: Secretary). Director nominations submitted by a stockholder will be
considered by the full Board. Each communication should clearly specify the name
of the individual director or group of directors to whom the communication is
addressed. Communications sent by email will be delivered directly to the
Corporate Secretary, who will promptly forward such communications to the
specified director addressees. Communications sent by mail will be promptly
forwarded by the Corporate Secretary to the specified director addressee or, if
such communication is addressed to the full Board of Directors, to the Chairman
of the Board, who will promptly forward such communication to the full Board of
Directors. Due to the infrequency of stockholder communications to the Board,
the Board does not believe that a more formal process is
necessary. However, the Board will consider, from time to time, whether
adoption of a more formal process for such stockholder communications has become
necessary or appropriate.





In
general, advance notice of nominations of persons for election to our Board or
the proposal of business to be considered by the shareholders must be given to
our Secretary no earlier than the October 1 or later than December 1 preceding
the next year's annual meeting, which would be scheduled in the month or May or
June.




A
shareholder's notice of nomination should set forth (i) as to each person whom
the shareholder proposes to nominate for election or re-election as a director,
all information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934
(including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director, if elected); (ii) as to any other
business that the shareholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such shareholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (iii) as to the shareholder giving the notice
and the beneficial owner, if any, on whose behalf the nomination or proposal is
made, (A) the name and address of such shareholder, as they appear on our books,
and of such beneficial owner, (B) the number of shares of our common stock that
are owned (beneficially or of record) by such shareholder and such beneficial
owner, (C) a description of all arrangements or understandings between such
shareholder and such beneficial owner and any other person or persons (including
their names) in connection with the proposal of such business by such
shareholder and any material interest of such shareholder and of such beneficial
owner in such business, and (D) a representation that such shareholder or its
agent or designee intends to appear in person or by proxy at our annual meeting
to bring such business before the meeting.





Other
Information about our Board of Directors




During
2008, our Board of Directors held four meetings and acted three times by written
consent. All directors attended at least 75% of the meetings of the Board and
committees of the Board on which they served.





We do not
have a formal policy on attendance at meetings of our shareholders; however, we
encourage all Board members to attend shareholder meetings that are held in
conjunction with a meeting of our Board of Directors.




Code
of Business Ethics




We have
adopted a Code of Conduct and Ethics that applies to our directors and officers.
A copy of this Code may be obtained by requesting a copy in writing to the
Company’s Secretary at 301 East Pine Street, Suite 150, Orlando,
Florida 32801. The full text of the Code of Conduct and Ethics will be
published on our website, which is under construction at this time. We intend to
disclose any future amendments to, or waivers from, certain provisions of the
Code of Conduct and Ethics on this website within five business days following
the date of such amendment or waiver.





21




Item
11. Executive Compensation.







I
The following table sets forth all compensation awarded to, earned by, or paid
for all services rendered to the Company during fiscal 2007 and 2008, by our
former and current Chief Executive Officers, and by our current Chairman and
President and current Chief Financial Officer.  Each person below is
referred to as a named executive officer.





SUMMARY
COMPENSATION TABLE




Name
      and
                          Principal
                          Position
                          (a)
                        Year
                          (b)
                        
                        Salary
                          ($)(1)
                          (c)
                        
                        Bonus
                          ($)
                          (d)
                        Stock
                          Awards
                          ($)
                          (e)
                        Option
                          Awards
                          ($)
                          (f)
                        Non-Equity
                          Incentive
                          Plan
                          Compensation
                          ($)
                          (g)
                        Change
      in
                          Pension
                          Value
      and
                          Nonquali-
                          fied
                          Deferred
                          Compensation
                          Earnings
                          ($)
                          (h)
                        All
      Other
                          Compensation
                          (i)
                        
                        Total
                          ($)
                          (j)Alexei
      A. Kim, Chief Executive Officer
                        2007
                        
                        $
                        6,192
                        
                        
                        
                        
                        
                        
                        
                        $
                        6,1922008
                        
                        
                        6,192
                        
                        
                        
                        
                        
                        
                        
                        
                        6,192Ramon
      E. Rosales, Chief Executive Officer (through August 4,
      2008)
                        2007
                        
                        $
                        36,000
                        
                        
                        
                        
                        
                        
                        
                        $
                        36,0002008
                        
                        
                        36,000
                        
                        
                        
                        
                        
                        
                        
                        
                        36,000Alexei
      I Kim, President and Chairman
                        2007
                        
                        $
                        22,560
                        
                        
                        
                        
                        
                        
                        
                        $
                        22,5602008
                        
                        
                        22,560
                        
                        
                        
                        
                        
                        
                        
                        
                        22,560Iuriy
      Vladimirivich Shevchenko, Chief Financial Officer
                        2007
                        
                        $
                        13,248
                        
                        
                        
                        
                        
                        
                        
                        $
                        13,2482008
                        
                        
                        13,248
                        
                        
                        
                        
                        
                        
                        
                        
                        13,248





(1)
            The
      amounts reflected in the above table do not include any amounts for
      perquisites and other personal benefits extended to the named executive
      officer.  The aggregate amount of such compensation for the
      named executive officer is less than 10% of the total annual salary and
      bonus.




Stock
Options Granted and Exercised in Fiscal 2008




No stock
option grants were made to the Board of Directors members in fiscal 2008,
and no stock options were exercised by the directors in fiscal
2008.





Director
Compensation





All
directors are reimbursed for expenses incurred in connection with each Board or
committee meeting attended. In addition, the Board of Directors has adopted the
following compensation program for the outside members of the Board of
Directors:






            Each
      non-executive Board member receives annual cash compensation of $2,500,
      paid in equal quarterly payments. Cash compensation for new and
      terminating Board members is prorated for the period of time that they
      were a Board member during the respective quarter.
            Audit
      Committee members receive an additional $7,500 of annual cash
      compensation, paid in equal quarterly
payments





No
director compensation was paid in 2008.





22





Employment
Agreements




Neither
us, nor any of our subsidiaries, have entered into an employment contract with a
named executive officer.




Employee
Benefit Plans




We do not
currently have any type of employee compensation plan for our employees,
officers or directors.







Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.




As of
March 1, 2009, the Company had a total of 24,464,799 shares of common stock
issued and outstanding, which is the only issued and outstanding voting equity
security of the Company.





The
following table sets forth, as of March 1, 2009, certain information with
respect to the beneficial ownership of our common stock by each stockholder
known by us to be the beneficial owner of more than 5% of our common stock and
by each of our current directors and executive officers. Each person has sole
voting and investment power with respect to the shares of common stock, except
as otherwise indicated. Beneficial ownership consists of a direct interest in
the shares of common stock, except as otherwise indicated.








Name
      and Address of Beneficial Owner
                Amount
      and Nature of
                  Beneficial
      Ownership
                Percentage
                  of
      Class(1)Alexei
      Ivanovich Kim
                  c/o
      OJSC 494 UNR, 4 Stroitelnaya St.,
                  Bronnitsy,
      Moscow District,
                  Russia
      141070.
                20,500,000
      shares of
                  common
      stock
                83.79%All
      Officers and Directors as a Group
                  (9
      persons)
                20,500,000
      shares of
                  common
      stock
                83.79%




(1)
Based on 24,464,799 shares of common stock issued and outstanding as of March 1,
2009. Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or investment power with respect to securities.
Except as otherwise indicated, we believe that the beneficial owners of the
common stock listed above, based on information furnished by such owners, have
sole investment and voting power with respect to such shares, subject to
community property laws where applicable.




Item
13. Certain Relationships and Related Transactions, and Director
Independence.




Acquisition
of 494 UNR





At the
closing of the purchase of a controlling interest of 66.83% of the outstanding
common and preferred stock of 494 UNR on August 5, 2008, the Company issued to
Alexei I. Kim, the controlling stockholder of 494 UNR, 20,500,000 shares of our
common stock, which constitutes following such issuance 83.79% of our
outstanding shares of common stock.





Based on
the number of our outstanding voting securities as of November 17, 2008, Alexei
Ivanovich Kim owns beneficially approximately 83.79% of our issued and
outstanding shares of common stock. The consideration furnished by Mr. Kim, the
controlling stockholder of 494 UNR, to the Company was comprised of 1,990,607
shares of common stock, of a total of 3,445,260 shares of common stock
outstanding prior to the acquisition, and 1,079,316 shares of preferred stock,
of a total of 1,148,420 shares of preferred stock outstanding prior to the
acquisition, representing beneficial ownership of 66.83% of the outstanding
common and preferred stock of 494 UNR, valued at $128,988. The sources of funds
used by Mr. Kim to acquire control of the Company was his personal ownership
interest in 494 UNR.




23




Sale
of Prior Business





Under the
March 24, 2008 Acquisition Agreement providing for the share exchange with the
controlling stockholder of 494 UNR, the former management had agreed in
connection with the closing under the Acquisition Agreement to assume all debt
of the Company in exchange for the assets of the Company’s former subsidiary, “
Conjunto Habitacional Maria Paz”. The sale was accomplished by the transfer of
the ownership interests in this subsidiary in exchange for the assumption of
approximately $1.0 million of debt as of the closing date of the sale. The sale
was completed on August 4, 2008. The net assets sold in this transaction were
approximately $400,000, representing the net assets of the Company as shown on
its June 30, 2008, unaudited balance sheet included in its Quarterly Report on
Form 10-Q, filed with the SEC on August 11, 2008, reduced by approximately
$400,000 for the costs of uncompleted contracts due to the economic conditions
within the construction industry sector in Ecuador. Following the sale of the
existing business to former management we retained no assets or liabilities
attributable to operations of the parent corporation or to operations of the
Ecuador subsidiary prior to the sale of subsidiary’s assets and assumption by
prior management of its liabilities. The purchase price was determined
consistent with the Acquisition Agreement, to transfer all assets and
liabilities of the former construction business, so that none of such assets or
liabilities would remain with the Company following the acquisition of 494
UNR.




Corporate
Policies as to Related Party Transactions




The
Company reviews related party transactions. Related party transactions are
transactions that involve the Company’s directors, executive officers, director
nominees, 5% or more beneficial owners of the Company’s Common Stock, immediate
family members of these persons, or entities in which one of these persons has a
direct or indirect material interest. Transactions that are reviewed as related
party transactions by the Company are transactions that involve amounts that
would be required to be disclosed in our filings under SEC regulations and
certain other similar transactions. Pursuant to the Company’s Code of Conduct
and Ethics, employees and directors have a duty to report any potential
conflicts of interest to the appropriate level of management or to to the
attention of the Chief Executive Officer, the Chief Financial Officer, or legal
counsel as appropriate in the circumstances. The Company evaluates these reports
along with responses to the Company’s annual director and officer questionnaires
for any indication of possible related party transactions. If a transaction is
deemed by the Company to be a related party transaction, the information
regarding the transaction is reviewed and subject to approval by our Board of
Directors.




Item
14.  Principal Accountant Fees and Services




(1) Audit
Fees.


The
aggregate fees billed by our current independent auditors, Wiener Goodman &
Company, P.C., for professional services rendered for the audit of our financial
statement filed as part of our 2008 Form 10-K filing and for review of our
interim financial statements filed as part of our first, second and third
quarter reports on Form 10-Q filed for the fiscal year of 2008 are
$56,262.





The
aggregate fees billed by Wiener Goodman & Company, P.C. for professional
services rendered for the audit of our financial statement filed as part of our
2007 Form 10-KSB filing and for review of our interim financial statements filed
as part of our first, second and third quarter reports filed for the fiscal year
of 2007 are $45,290.





(2)
Audit-Related Fees.


There
have been no audit-related fees billed by our accountants in each of the last
two fiscal years of our Company.





(3) Tax
Fees.


There
have been no tax fees billed by our accountants in each of the last two fiscal
years of our Company.





(4) All
Other Fees.


There
have been no other fees billed by our accountants in each of the last two fiscal
years of our Company.




24




(5)
            It
      is the policy of our board of directors that before the accountant is
      engaged to render audit or non-audit services, the engagement is approved
      by the Board of Directors that is at present acting as the Audit
      Committee.





(6) Not
applicable.




Item
15. Exhibits and Financial Statement Schedules.




(a)(3)
Exhibits




Exhibit
      No.
              
              Description3.1
              
              Articles
      of Incorporation (incorporated by reference to Exhibit 2.1 to the
      Company’s Registration Statement on Form 10-SB, filed with the Commission
      on August 31, 1999).3.2
              
              By-Laws
      (incorporated by reference to Exhibit 2.2 to the Company’s Registration
      Statement on Form 10-SB, filed with the Commission on August 31,
      1999).3.2a
              
              Amendment
      to By-Laws (incorporated by reference to Exhibit 3.2a to the Company’s
      Current Report on Form 8-K, filed with the Commission on October 17,
      2008).10.3
              
              Acquisition
      Agreement, dated March 24, 2008, between the Company and OJSC “494 UNR”
      (incorporated by reference to Exhibit 10.3 to the Company’s Current Report
      on Form 8-K, filed with the Commission on August 7,
  2008).14.1
              
              Code
      of Conduct (incorporated by reference to Exhibit 14.1 to the Company’s
      Annual Report on Form 10-KSB, filed with the Commission on March 31,
      2008).31.1
              
              Certification  of
      Chief Executive Officer Pursuant to Section 302 of the Sarbanes Oxley Act
      of 2002, filed herewith.31.2
              
              Certification  of
      Chief Financial Officer Pursuant to Section 302 of the Sarbanes Oxley Act
      of 2002, filed herewith.32.2
              
              Certification
      of Chief Executive Officer Pursuant to 18  U.S.C. Section 1350
      as adopted pursuant to Section  906 of the Sarbanes-Oxley Oxley
      Act of 2002, filed herewith.32.2
              
              Certification
      of Chief Financial Officer Pursuant to 18  U.S.C. Section 1350
      as adopted pursuant to Section  906 of the Sarbanes-Oxley Oxley
      Act of 2002, filed herewith.





25


SIGNATURES





In
accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.




PROMOTORA
      VALLE HERMOSO CORPORATIONDate:
      April 7, 2009
                  By:
                  /s/
      Alexey A. KimAlexey
      A. Kim , Chief Executive Officer




Date:
      April 7, 2009
              By:
              /s/
      Iuriy Vladimirovich ShevchenkoIuriy
      Vladimirovich Shevchenko, Chief Financial Officer




In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.




Date:
      April 7, 2009
                          By:
                          /s/
      Alexey A. KimAlexey
      A. Kim , Chief Executive Officer and DirectorDate:
      April 7, 2009
                          By:
                          /s/
      Alexey I. KimAlexey
      I. Kim, President and Chairman of the Board of DirectorsDate:
      April 7, 2009
                          By:
                          /s/
      Iuriy Vladimirovich ShevchenkoIuriy
      Vladimirovich Shevchenko, Chief Financial Officer and
    Director




Date: April
      7, 2009
                                    By:
                                    /s/
      Sergey Petrovich YushkevichSergey
      Petrovich Yushkevich, Chief Accounting Officer and
  DirectorDate:
      April 7, 2009
                                    By:
                                    /s/
      Andrey Andreevich NikolaychukAndrey
      Andreevich Nikolaychuk, DirectorDate:
      April 7, 2009
                                    By:
                                    /s/ Galina
      Nikolayevna PyatyshevaGalina
      Nikolayevna Pyatysheva, DirectorDate:
      April 7, 2009
                                    By:
                                    /s/
      Victor Vladimirovich MilukovVictor
      Vladimirovich Milukov, DirectorDate:
      April 7, 2009
                                    By:
                                    /s/
      Stefan C. MancasStefan
      C. Mancas, DirectorDate:
      April 7, 2009
                                    By:
                                    /s/
      Viorel B. SarebouneViorel
      B. Sareboune, Director




26