CONSTRUCTION MATERIALS NANOCENTER SULKHAN DAVITADZE, Director for Infrastructure Programs, Rusnano SERGEY TSYBUKOV, Vice-Chairman of the Board, SPb CCI DARIA LIPATOVA, Project Manager Rusnano Development Workshop Babson Executive Conference Center Babson College November 12, 2010

Project summary: Construction Materials Nanocenter aims to develop the innovation infrastructure in the sphere of nanotechnologies by organization of different types of production and technologies development. Project Team: Institute of Polymers, SPbSU, Krylova and Ioffe Institutes Market Opportunity: Polymer coating Solutions for Railway transport, Water canals, Housing and communal services, Shipbuilding, Real Estate, other services – total 200 mln $ The Model: Nanocenter will provide services and technology support to customers and will develop and transfer technologies to market through creation 5-7 companies per year and licensing technologies for customers. Rusnano rents scientific equipment to the Company. Status: Creation of the Companies – Asset Holder and Managing Company and providing services and technology support. Exit Strategy: sale to big customer (military-industrial complex, shipbuilding, transport, building, research center) or a large-scale producer and/or provider of raw materials CONSTRUCTION MATERIALS NANOCENTER

Main directions of the Centers activities: 1. Technical items for the transport industry Partner: The Center for Dynamic Testing 2. Nano-coatings for Optoelectronics Partner: The Center for Prototyping 3. Nano-coatings for transport, Real Estate, Watercanals (green technologies), Shipbuilding and Housing and Communal Services Partner: The Polymer Cluster CONSTRUCTION MATERIALS NANOCENTER

NANOCENTER Problems to be Solved: Frequent repair of networks of water, heating and gas supply (Russia and the CIS) Protection of cargo cars and extension of operation life of railroads (OJSC "Russian Railways) Development of the Arctic Region (Arctic Fleet) Energy saving (housing and communal services) Solution: Repair of pipes and wells with use of prepregs and special paints Drawing of anticorrosive, waterproofing coverings Development of anti-icing coverings, replacement of metal items with the polymer ones Drawing of thermo-insulating polymer coverings Team: The Russian - German Institute of Polymers established within the frameworks of the Transform program under the aegis of the Government of Germany with participation of the SKZ Polymer Center, Wurzburg (Germany) and SPb CCI in September It is one of the leaders in the sphere of R&Ds aimed at introduction into practice of construction polymer materials and a participant of the Polymer Cluster.

Market Strategy: B2B, OEM Direct marketing Creation of the new markets with our partners Cost reduction (current price for sq.m. is $ vs. ours 30-70$) Current Competitive Market: Companies drawing foamed polyurethane coatings Organizations and research institutions offering composite mixes or materials and technologies for drawing of the coatings CONSTRUCTION MATERIALS NANOCENTER

Current Status: Customers: Russian Railways, Vodokanal, Municipalities, Research Institutes Products: Technologies, technical items, R&Ds Critical Risks: No guarantees from the side of the research institutions for completing obligations on operational development of a nanotechnology to industrial release; Absence in the enterprise of the whole spectrum of research equipment allowing to perform this operational development independently. CONSTRUCTION MATERIALS NANOCENTER

Section of fullerenes and nanocomposites manufacturing Section of prepreg manufacturing THE LINE OF BINDING IMPREGNATING BY MELT FILLERS NANOMODIFICATION Laboratory Complex ( Quality Control ) GRINDING THE PREPREGES Section of composite products manufacturing SECTION OF NANOMATERIALS RECYCLING: - PRESSURED FOUNDRY; - PRESS_FORMING; - EXTRUSION; - COATING DEPOSITION.. SECTION OF WINDING THE TUBULAR PRODUCTS: - HOT FORMING Section of production of nano- containing polymer materials and compositions for drawing of coverings FINISHED PRODUCTION CUSTOMER Centers functional scheme:

Funding Requirements: Financials: CONSTRUCTION MATERIALS NANOCENTER 8 Total 2 Equipment for laboratory 2 Equipment for a site for prepregs production 4 Plant for fullerenes production Sum, mln $ Sales proceeds, thousand rbl. EBITDA, thousand rbl. Net profit, thousand rbl.

Economics of the project: Planning horizon – 6 years IRR 37% NPV thousand doll. at the rate of discounting of 22% Period of recoupment 4 years and 8 months Discounted period of recoupment 5 years and 5 months Proceeds, thousand dollars Joint money flow, thousand dollars Free money flow of the company, thousand dollars NWC, thousand dollars Capex, thousand dollars EBITDA, thousand dollars Value and prognosis of the main financial indexes CONSTRUCTION MATERIALS NANOCENTER

THANK YOU SULKHAN DAVITADZE, Director for Infrastructure Programs, Rusnano SERGEY TSYBUKOV, Vice-Chairman of the Board, SPb CCI DARIA LIPATOVA, Project Manager

APPENDIX THE SUPPLEMENTAL INFORMATION

The project Creation of the construction materials nanocenter is included in the list of strategic projects of development of St. Petersburg and presented during the following international visits: Visit of the Delegation of St. Petersburg led by the Governor of St. Petersburg V.I. Matvienko to the South America, April 2010; Visit of the Delegation of St. Petersburg led by the Vice-Governor of St. Petersburg R.E. Filimonov to Ukraine, April 2010; International Forum Effective Cooperation in Europe, Belgium, June 2010; Round Table on Effective Cooperation in the Baltic Sea Region, Finland, September 2010.

INNOVATION POLYMER CENTER ON THE PLATFORM OF THE POLYMER CLUSTER

Building of the Innovation Polymer Center is planned in St. Petersburg, Vyborgskaya emb., 41A. This Center supports the whole cycle of innovative activity from the projecting stage to the introduction of the new companies and products to the market. On the platform of the Polymer Cluster which includes the Institute of Polymers, the project of construction of a building for the specialized Center for 15 thousand m2 is planned. The Center of collective access can become the anchor tenant in this building. INNOVATION POLYMER CENTER

IndexBasic rates in 2010 Total area of the Center, sq. m ,5 Area of the Center, sq. m Area for rent, sq. m ,1 Area for offices, sq. m ,6 Area for parking, sq. m ,5 Cost of building of the Center + decorating, $ Exploitation costs, sq. m., month, $ 40 Rent for offices, sq. m., month, $ 50 Rent for parking, place, month, $ 25 INNOVATION POLYMER CENTER

IndexBasic rates in 2010 Building costs, $ Projection costs, $ Concerned period of the project development including: 9 - building, years 2 - exploitation, years 7 Period of recoupment, years of exploitation 3,8 Net profit for 7 years of exploitation, $ Discounting rate, % 15 Discounting period of recoupment, years of exploitation 5,3 NPV for 7 years of exploitation, $ IRR, % 22,7 INNOVATION POLYMER CENTER