2012 Investment project of cement plant construction in Soligalich municipal district of the Kostroma region

Project target is cement plant construction in Soligalich municipal district in order to satisfy the cement needs of Kostroma, Yaroslavl and Vologda regions. Competitors are located at the considerable distance from aforenamed consumers. Plant’s production capacity – up to 2,7 million tons of cement per year. Project value – 14,8 billion roubles. Financial sources: - 25 % of own funds; - 75 % of borrowed funds. Planning and construction period – 3 years. Type of products – cement М-400 и М-500. Resource basis: 1. Limestone reserves – 74 million tons; 2. Clay reserves – from 15 to 20 million tons; 3. Sand reserves – 6 million tons. 2 Project description

3 Location of sources of raw materials

4 Project realization plan 1 st year2 nd year3 rd year4 th year5 th year Feasibility Decision making Realization team Contracts conclusion Construction site preparation Construction-and-geological examination Primary project Ongoing project Construction works Steel constructions delivery Equipment delivery Installation Construction works completion Test runs Start up Examination - guarantee Permanent maintenance Staff training

5 Infrastructure Construction site is situated about 7 km north-west from Soligalich of Kostroma region. Land plot area – 40 ha. Building area – 18 ha. Necessary construction for project realization: 1. Gas pipeline – up to 47 km; 2. Railway line from Galich to Soligalich – up to 110 km; 3. Highway – up to 20 km. Energy resources needs: 1. Power energy – kW*h per year; 2. Natural gas – 288 milion m3 per year. For energy resources needs satisfaction it is planned to build a gas-piston power station with capacity of 30 MW. Drinking water provision is planned to carry out by wells of 50 metre depth, technical water – by water intake of Svetlitsa river.

Social efficiency indicators: 1. Number of new working places: permanent working places – 825 workers; temporary working places – 300 workers. 2. Average salary – roubles. Kostroma region administration is ready to provide the most favoured nation treatment for the investment project in part of exemption from payment of the following taxes payable to the regional budget during the payback period: - exemption from payment of property tax; - reduction of the rate of profit tax from 18% to 13,5%. 6 Project efficiency indicators

Indicator With privileges, thousand roubles Without privileges, thousand roubles Revenue (excluding VAT) ,26 Paid for suppliers and employees ,86 EBITDA ,40 Depreciation ,78 Paid taxes , ,68 Interests on loans ,93 Net profit , ,01 NPV , ,5 IRR, % 45,6033,27 Economic efficiency indicators: 7

Budgetary efficiency indicators 8 Project efficiency indicators Indicator With privileges, thousand roubles Without privileges, thousand roubles Federal budget, including , ,8 VAT ,07 Profit tax , ,73 Regional budget, including , ,18 Profit tax , ,53 PIT ,54 Property tax ,11 Municipal budget, including75 309,23 PIT ,23 Land tax 4 800,00 Social payments ,31 Total , ,52