2012 Brick plant construction with annual capacity of 60 million pieces in Buj municipal district of the Kostroma region

Project description 2 Project target – brick plant construction with annual production capacity of 60 million pieces in Buj municipal district of the Kostroma region. Planning period - 10 years. Start of production is scheduled for the 4 th quarter of the second year, reaching for production capacities – for the 4 th year of project realization. Investment project envisages the production of two types of brick: - ceramic hollow thickened brick, size of 250*120*88 mm; - ceramic hollow normal-sized brick, size of 250*120*88 mm. Project value – 1,3 billion roubles. Financial sources: - 20 % of own funds; - 80 % of borrowed funds.

- favourable investment climate; - advantageous geographical location; - availability of transit transport network; - low level of social conflicts. Location 3

О Brick market 4 The demand for bricks, depending on the purpose of type of construction, prevails in the segment of dwelling houses construction and amounts to 67%. For non-industrial buildings construction it accounts to 20% of internal brick market. Social sphere objects and industrial buildings construction is insignificant part of brick market. In Russian brick market structure ceramic brick prevails (42%). There are about 700 brick plants in Russia. Main brick consumers are building enterprises which implements civil-housing, civil-industrial and other types of construction, wholesale companies and inhabitants that use ceramic brick for individual construction.

Production capacity is 60 million bricks per year Personnel – 88 workers including 10 workers for quarry works organization. Average salary – from 19 thousand roubles Payback period – 7 years 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%. Brief information about the project Project efficiency indicators 5

Indicator With privileges, thousand roubles Without privileges, thousand roubles Revenue (excluding VAT) ,14 Paid for suppliers and employees ,24 EBITDA ,9 Depreciation ,45 Paid taxes , ,55 Interests on loans ,78 Net profit , ,12 NPV , ,15 IRR, % 24,2419,43 Project economic efficiency Project efficiency indicators 6

Indicator With privileges, thousand roubles Without privileges, thousand roubles Federal budget, including , ,9 VAT ,5 Profit tax , ,4 Regional budget, including , ,17 Profit tax , ,63 PIT ,54 Property tax , Municipal budget, including11 707,52 PIT 9 457,52 Land tax Social payments ,52 Total , ,11 Project budgetary efficiency Project efficiency indicators 7