2012 Investment project of OSB production in Buj of Kostroma region

Project description 2 Project target is construction of OSB production plant in Buj (Kostroma region) with annual capacity of 400 thousand cub. m using modern technologies and equipment. Planning period is 8 years. Start of production is scheduled for the 1 st quarter of the third year, reaching for the production capacities – for the 6 th year of project realization. Investment project production plan involves production of board with thickness from 6 to 40 mm of basic format of 1 250*2 500 mm. Annual volume of raw materials consumption is 440 thousand m 3 for the capacity of 200 thousand m 3 and 880 thousand m 3 for the capacity of 400 thousand m 3. Raw materials are partially prepared at the own timber production, partially – are purchased from indirect logging enterprises. Project value thousand RUR (excluding VAT) 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

Production capacity – 400 m 3 of boards per year Total number of workers Average salary – от 26,7 тыс. рублей Payback period – 6 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 4

Indicator With privileges, thousand roubles Without privileges, thousand roubles Revenue (excluding VAT) ,60 Paid for suppliers and employees ,37 EBITDA ,23 Depreciation ,11 Paid taxes , ,75 Interests on loans ,78 Net profit , ,60 NPV , ,45 IRR, % 23,9521,88 Project economic efficiency during planning period Project efficiency indicators 5

Indicator With privileges, thousand roubles Without privileges, thousand roubles Federal budget, including , ,71 VAT ,52 Profit tax , ,19 Regional budget, including , ,89 Profit tax , ,71 PIT ,0 Property tax , ,18 Municipal budget, including45 428,2 PIT ,2 Land tax Social payments ,67 Total , ,47 Project budgetary efficiency Project efficiency indicators 6