#1Deutsche Bank Global Emerging Markets Conference Investor presentation September 2014 843 11 11 11 11 11 Etalon Group#2Disclaimer IMPORTANT: You must read the following before continuing. The following applies to the presentation (the "Presentation") following this important notice, and you are, therefore, advised to read this important notice carefully before reading, assessing or making any other use of the Presentation. In accessing the Presentation, you unconditionally agree to be bound by the following terms, conditions and restrictions. This Presentation has been prepared by Etalon Group Limited ("Etalon Group" or the "Company") for informational purposes only and does not constitute or form part of, and should not be construed as, an offer or invitation to sell or issue, or any solicitation of any offer to subscribe for or purchase any securities of the Company in any jurisdiction or an inducement to enter into investment activity. This Presentation is strictly confidential and may not be copied, distributed, published or reproduced in whole or in part, or disclosed or distributed by recipients to any other person in any form. This Presentation (i) is not intended to form the basis for any investment decision and (ii) does not purport to contain all the information that may be necessary or desirable to evaluate the Company fully and accurately or otherwise in all material respects, and (iii) is not to be considered as recommendation by the Company or any of its affiliates that any person (including a recipient of this Presentation) participate in any transaction involving the Company or its securities. The information contained in this Presentation has not been independently verified and the Company does not undertake any obligation to do so. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained in the Presentation or any other material discussed in connection with the Presentation. Neither the Company nor any of its directors, officers, employees, shareholders, affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection with the Presentation. Any forward-looking statements', which include all statements other than statements of historical facts, including, without limitation, forecasts, projections and any statements preceded by, followed by or that include the words 'targets', 'believes', 'expects', 'aims', 'intends', 'will', 'may', 'anticipates', 'would', 'could' or similar expressions or the negative thereof, involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements include statements regarding: our construction programme and future construction and development projects (information concerning which is being provided solely on an indicative basis for information purposes only and is subject to change without notice); strategies, outlook and growth prospects; future plans and potential for future growth; liquidity, capital resources and capital expenditures; growth in demand; economic outlook and industry trends; developments of markets; the impact of regulatory initiatives; and the strength of competitors. Such forward-looking statements are based on numerous assumptions by management regarding present and future business strategies and the environment operating in the future. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control. The information contained in this document is provided as at the date of this Presentation and is subject to change without notice. The Company does not intend or have any duty or obligation to supplement, amend, update or revise any of the forward-looking or other statements contained in this Presentation. Construction programme area figures set out in this presentation, including the "Total area of construction programme" figures, may not reflect the final construction programme area figures. Whether such figures do or do not reflect the final construction programme area figures, they may not reflect the revenues ultimately recognized by Etalon. Calculating construction programme area figures is an inherently subjective process, and is subject to uncertainty. In addition, the construction programme area figures may not be directly comparable to figures given in respect of similar portfolios held by other real estate development businesses in the Russian market as a result of different assumptions and methodologies. In particular, the "Total area of construction programme" figures include area in which governmental authorities, and other third parties, have an interest. The term "NSA" as used in this Presentation refers to Net Sellable/Leasable Area. NSA figures include parking lots (calculated assuming an average parking lot area of 30 sqm) in the case of Projects under development, and exclude parking lots in the case of completed Projects. NSA figures also exclude communal areas and other areas not for sale. This Presentation contains certain unaudited half- and full-year financial information which has been prepared based on the Company's reviewed management accounts. Neither the Presentation nor any copy of it may be taken or transmitted into the United States of America, its territories or possessions, or distributed, directly or indirectly, in the United States of America, its territories or possessions. This Presentation does not contain or constitute and should not be construed as an offer to sell or the solicitation of an offer to buy securities in the United States. No securities of the Company have been registered or are intended to be registered under the Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state of the United States, and unless so registered may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Any failure to comply with these restrictions may be a violation of U.S. federal or applicable state securities laws. In any EEA Member State that has implemented the Prospectus Directive, this Presentation is only addressed to and is only directed at qualified investors in any relevant Member State within the meaning of the Prospectus Directive. The expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including Directive > Etalon Group 2010/73/EU, to the extent implemented in any relevant Member State) and includes any relevant implementing measure in any relevant Member State. This Presentation is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals within the meaning set out in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons in (i), (ii) and (iii) above together being referred to as "Relevant Persons"). Neither this Presentation nor any copy of it may be taken or transmitted into Canada and South Africa or to any securities analyst or other person in any of those jurisdictions. Any failure to comply with this restriction may constitute a violation of applicable securities law. The distribution of this presentation in other jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves about, and observe, any such restrictions. The Company has not registered and does not intend to register any of its securities under the applicable securities laws of Canada and South Africa, and, subject to certain exceptions, its securities may not be offered or sold within Canada and South Africa or to any national, resident or citizen of Canada and South Africa. The Company (a) has not offered or sold and will not offer or sell in Hong Kong any securities by means of any document other than (i) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong ("SFO") and any rules made thereunder, or (ii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies (Winding up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance; and (b) has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purpose of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to any securities, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to securities which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the SFO and any rules made thereunder. This document does not constitute an offering of any securities of the Company in Japan, Taiwan, Australia or Singapore. Any such offers would be subject to stringent regulation in these jurisdictions. The Company's securities have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended, the "FIEA") and, accordingly, securities may not directly or indirectly be offered in Japan or to, or for the benefit of, any resident of Japan or to others for re-offering or resale, directly or indirectly, in Japan or to any resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with the FIEA and other relevant laws and regulations of Japan. As used in this paragraph, "resident of Japan" means any person resident in Japan, including any corporation or other entity organised under the laws of Japan. The Company's securities have not been and will not be registered or filed with, or approved by, the Financial Supervisory Commission of Taiwan and/or other regulatory authority pursuant to relevant securities laws and regulations and may not be offered or sold in Taiwan through a public offering or in circumstances which constitute an offer within the meaning of the Securities and Exchange Act of Taiwan or relevant laws and regulations that requires a registration, filing or approval of the Financial Supervisory Commission and/or other regulatory authority of Taiwan. No offering circular, prospectus or other disclosure document (as defined in the Corporations Act 2001 of Australia (Cth) in relation to any securities of the Company has been or will be lodged with the Australian Securities and Investments Commission. Accordingly, any offers of securities of the Company in Australia must fall within an available exemption from the registration requirements there. No document has been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, any offers of securities of the Company in Singapore must fall within an available exemption from the registration requirements there. Information contained in this Presentation is not an offer, or an invitation to make offers, sell, purchase, exchange or transfer any securities in Russia or to or for the benefit of any Russian person, and does not constitute an advertisement of any securities in Russia. This information must not be passed on to third parties or otherwise be made publicly available in Russia. The Company's securities have not been and will not be registered in the Russian Federation or admitted to public placement and/or public circulation in the Russian Federation except as permitted by Russian law. This Presentation does not constitute or form a part of, and should not be construed as, (i) an advertisement of any securities of the Company, or an offer, or an invitation (including an invitation to make an offer) by or on behalf of the Company in the Russian Federation or in any other jurisdiction or (ii) any promise or representation that any such offer or invitation will be made and shall not form the basis of, nor may it accompany, nor form part of, any contract to acquire any securities of the Company in the Russian Federation or in any other jurisdiction. This Presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require registration of licensing within such jurisdiction. By receiving and reading this Presentation, you agree to be bound by the restrictions in this disclaimer, and acknowledge that that you will be solely responsible for your own assessment of the market, the market position of the Company and any securities of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company's business.#3Today's presenting team Boris Svetlichny Chief Financial Officer Member of the Board of Directors Kirill Bagachenko Head of Corporate Investments and IR Member of the Board of Directors Etalon Group 2#41 13 15 Financial results Company overview Etalon Group EEEEE T BEL Operating results 2014 deliveries Appendix#5Summary 1 2 Strong growth in 2013, with deliveries up 29% (in sqm) and revenue up by 48% (in RUB) compared to 2012 Project portfolio grows in value by 15% to USD 2.7 billion, or USD 9.3 per share (source: Jones Lang LaSalle) 3 New contract sales in 2013 increased 27% y-o-y to over RUB 30 billion 4 New contract sales in 1H 2014 increased 36% y-o-y to over RUB 17 billion 5 Balance sheet remains exceptionally strong with net cash of USD 7 million as of 30 June 2014 Etalon Group 4#6Company overview EEEEEEE Etalon Group#7At a glance Presence in rapidly growing markets •Focus on middle class residential real estate in Moscow metropolitan area (MMA) and St. Petersburg metropolitan area (SPMA) • 25% target CAGR for construction volumes over 2010-2016(1) Strong delivery track record • Over 26 years of construction & development experience ⚫3.9 mln sqm commissioned • 31% CAGR for deliveries over 2010-2013(2) True vertical integration • Strategic vertical integration in key value- added segments of property development enables the Company to control costs, quality and timing • 4,500 employees • Country-wide sales network covering 36 cities Diversified projects portfolio • Land bank of 3.44 mln sqm(3) • Land bank sufficient until 2018 •Projects well diversified by locations within both SPMA and MMA Etalon Group Liquidity and credit ratings • Secure liquidity position supported by pre-sales cash collections model • Strong financial standing with a net cash position of USD 7 mln (4) • Credit rating by S&P: B+/Stable/B+(5) Corporate governance ⚫ 10 BoD members, 5 NEDs • Board of Directors consists of professionals with broad range of experience and expertise, ensuring that the interests of all groups of shareholders are appropriately represented • Monthly visual updates on projects, quarterly trading updates and semi- annual financial reporting • Official guidance on deliveries and new contract sales • Dividend policy aims to pay out 15% to 30% of IFRS net profit semi-annually (1) Company expectations; (2) Company operating results; (3) Jones Lang LaSalle land bank valuation report as of 31.12.2013; (4) Unaudited management accounts as of 30.06.2014; (5) 'B+' long-term & 'B+' short-term corporate credit ratings of SSMO LenSpetsSMU with 'Stable' outlook (last reconfirmed on 29.07.2013). (6) Jones Lang LaSalle land bank valuation report as of 31.12.2013 LSE ticker Share price Market capitalization ETLN:LI USD 4.15 (15.08.2014) USD 1,212 mln (15.08.2014) Portfolio valuation (by Jones Lang LaSalle) USD 2,727 mln (31.12.2013) Portfolio composition (6) ■ SPMA 42% 58% ■MMA 5% ■Residential under construction ■Residential design 46% stage 49% ■Completed residential 6#8Strategic vertical integration: control over costs, quality and timing Etalon Group operates in every part of property development process > 40 business units > 4,000 people I Land Acquisition & Permits Design Effective Capital Recycling Construction Materials* Construction Contracting & Commissioning Funding Independence from suppliers, but only in crucial areas Tower Cranes** Sales & Marketing Ongoing Maintenance & Service G Control over costs, quality & timely delivery of the projects Business stability and lower risk of dependence on counterparties Understanding of customer needs (sales network throughout the country) * Brick plant and concrete products plant. Own production only for "bottleneck" construction materials ** 60 Liebherr tower cranes. Data as of 31.10.2013 Etalon Group 7#9Nationwide sales & marketing network supports sustainable contracting Powerful sales network across the country Regional population actively buys apartments in Moscow and St. Petersburg Murmansk Apatity Arkhangelsk Severodvinsk SPMA Cherepovets Petrozavodsk Yaroslavl MMA Izhevsk Ekaterinburg Ukhta ⚫ Norilsk Salekhard Nadim • Noviy Urengoy Siktivkar Noyabrsk Surgut Chelyabinsk Novosibirsk Etalon Group's sales offices / representatives Established relationships/ partnerships with local sales agencies Nizhnevartovsk Tomsk Etalon Group's regional sales geography(1) Share of total Region contracts Leningrad 6.3% Khanty-Mansiysk AD 2.9% Krasnoyarski krai 2.5% Murmansk 2.4% Yamalo-Nenets AD 2.0% Kamchatski krai 1.7% Khabarovski krai 1.7% Petropavlovsk- Kamchatskiy Yakutia 1.6% Yakutsk Magadan Other Russian regions 17.8% Mirniy Foreigners 0.6% Total: 39.6% ● Neryungri Khabarovsk Blagoveshchensk Usolye-Sibirskoye Irkutsk Uzhno- Sakhalinsk The Group's flats are sold in 14 out of 15 richest Russian regions Average income per capita (US$)(2) Nenets AD Yamalo-Nenets AD Vladivostok ⚫ Nakhodka 2075 1776 Moscow 1727 Chukotka 1534 Magadan 1331 Sakhalin 1251 Khanty-Mansiysk AD 1233 Tyumen 1138 Kamchatski krai Murmansk 1080 1020 Moscow region 1016 984 Yakutia 972 Sverdlovsk 964 Khabarovski krai Russia average 929 804 Etalon Group's target regions • Etalon Group sales force is focused on the regions with the largest income per capita Key markets: SPMA and MMA • • 36 cities covered with 13 sales offices in St. Petersburg and 15 more sales offices nationwide • External professional marketing and sales service agents engaged nationwide (1)Source: company data for the 2Q 2014 (2) Average monthly cash income per capita, Rosstat's estimates as of FY13, average USD/RUB fx rate in 2013 31.91 Etalon Group Saint Petersburg 8#10Operations in SPMA and MMA Projects in St. Petersburg Metropolitan Area Projects in Moscow Metropolitan Area Design stage Under construction Etalon Group 8 10 2 1 4 6 3 7 Design stage Under construction 3 2 4 5#11Project portfolio timeline Construction period Unsold NSA 2019 Unsold Project and 2014 2015 2016 2017 2018 beyond Status Total NSA ('000 sqm) (Etalon's share) ('000 sqm) (1) parking OMV (USDmln) (lots), # Current Projects Income from Construction Outstanding sales (2) (USDmln) (3) budget(3) budget (USDmln) (USDmln) St. Petersburg Metropolitan Area (SPMA) 1. Galactica Design stage 752.3 663.5 3,379 258.0 2,115.7 1,156.2 1,152.9 2. Tsar's Capital 3. Swallow's Nest 4. Moscow Gates 5. Samotsvety 6. Molodejny 7. Rechnoy Construction 390.3 277.1 2,109 279.8 1,101.4 502.1 384.6 Construction 333.7 246.7 1,834 247.9 612.7 416.1 136.8 Design stage 202.0 202.0 945 137.1 584.0 267.6 259.3 Construction 189.1 189.1 1,773 125.0 541.6 248.5 226.8 Construction 111.8 64.5 760 56.9 193.9 129.0 91.6 Construction 109.7 59.2 561 50.0 169.4 128.4 85.2 8. Technopark Design stage 50.7 50.7 240 16.3 110.4 66.5 66.4 9. Galant Construction 49.2 33.6 110 68.0 131.5 64.3 27.4 10. Beloostrovskaya Design stage 34.3 34.3 175 11.6 91.9 54.8 54.8 Total SPMA 2,223.1 1,820.7 11,886 1,250.6 5,652.5 3,033.5 2,485.9 Moscow Metropolitan Area (MMA) 1. Emerald Hills Construction 862.1 571.8 3,703 448.2 1,960 1,024.8 677.7 2. Etalon-City 3. Dmitrovskoe shosse 4. Alekseevskiy District 5. Budennogo street 6. Losinoostrovskiy District Construction 429.5 329.4 3,780 182.4 954.5 503.1 488.3 Design stage 287.4 226.9 1,895 151.4 844.5 410.3 410.3 Design stage 182.9 169.6 2,160 235.4 705.7 239.8 239.8 Design stage 70.0 70.0 709 64.2 228.7 89.4 89.4 Design stage 69.6 69.6 540 88.2 309.0 108.0 108.0 Total MMA Total Current Projects 1,901.5 1,437.3 12,787 4,124.6 3,258.0 24,673 1,169.8 2,420.4 5,002.4 2,375.4 2,013.5 10,654.9 5,408.9 4,499.4 Completed Projects Completed and unsold residential developments Completed stand-alone commercial properties Total Completed Projects All Projects Total Etalon Group 162.8 21.5 184.3 3,189 258.2 59 48.4 3,248 309.6 3,442.3 27,921 2,727 (1) Source: construction period based on company estimates, all numbers based on JLL report as of 31.12.2013 Including parking with average area c. 30 sqm (3) Excluding land acquisition costs (2) Income from sales includes potential and received incomes as of 31 December 2013 Etalon Group 10#12Construction programme Construction programme, ths sqm of NSA 200 209 Source: Company estimates 2010 Etalon Group 364 363 319 328 2011 Actual 25% CAGR 467 468 +24% 2012 2013 Construction programme 580 2014 707 2015 Projects under acquisition 800 800 2016 2017 11#13Updated 2013 landbank valuation by Jones Lang LaSalle Open market value, USD mln Open market value per share, USD Breakdown by region Breakdown by stage of development 2 369 +15% 2 727 8.1 +15% 5% 9.3 42% 46% 58% 49% 2012 2013 2012 2013 ■ SPMA ■MMA ■Residential under construction ■Residential design stage ■Completed residential projects Robust growth of open market value based on well diversified portfolio Market value of the Group's portfolio as of 31 December 2013 reached USD 2,727 million, up 15% year-on-year Landbank volume remained generally stable at 3.44 million sqm of unsold NSA The Company acquired two new projects during 2013 - one in Moscow and one in St. Petersburg Total planned NSA for several projects currently in design stage has been increased from original conservative estimates in the process of finalising design parameters Share of MMA projects reached 42% The portfolio includes 412 thousand sqm of completed & available for sale property at projects that are completed or still underway, out of which completed & available for sale apartments account for 238 thousand sqm. Jones Lang LaSalle estimates potential income from sale of these properties at USD 795 million and USD 648 million, respectively Etalon Group 12#14NON-EXECUTIVE DIRECTORS EXECUTIVE DIRECTORS Board of Directors represents interests of all investor groups Anton Evdokimov Chief Executive Officer Viacheslav Zarenkov Chairman of the Board of Directors, Founding shareholder and President Experience and awards 44 years of experience in construction industry Honoured builder of Russia (1) Education Institute of Civil Engineering and SPb University of Internal Affairs PhD in Economics, PhD in Technical Sciences, PHD in Architecture, Professor Boris Svetlichny Chief Financial Officer Dmitry Zarenkov Vice-President Experience and awards • • 27 years of experience in construction industry Certificate of Honour of the Ministry of Regional Development Education ⚫ Leningrad Engineering Construction Institute, SPb State University and International Banking Institute, Open University Business School (MSc in International finance, MBA in business strategy) Michael John Calvey Senior partner at Baring Vostok since 1999 • Experience and awards Over 25 years experience in finance and senior management with international and Russian companies • Recent experience included CFO position at Orange in Russia, VP for Finance at Vimpelcom and CFO at Golden Telecom Education University of Massachusetts (BBA in Accounting) • Carnegie-Mellon University (MBA) Alexei Kalinin Senior partner at Baring Vostok Experience and awards • 17 years of experience in construction industry • Honoured builder of Russia(1); Certificate of Honour of the Ministry of Regional Development Education ⚫ Institute of Aeronautical Instrumentation, SPb University of Architecture & Civil Engineering, SPb University of Internal Affairs ⚫ PhD in Engineering Kirill Bagachenko Head of Corporate Investments and IR Experience and awards Member of the board of Europlan, Volga Gas, Gallery Media Group • Worked at EBRD, Salomon Brothers, Sovlink Corporation • Ex-Member of the board of CTC Media, Golden Telecom, Burren Energy • Education University of Oklahoma and London School of Economics Martin Cocker Independent Non-Executive Director Experience and awards With Baring Vostok since 1999 Worked at Alfabank and Alfa Capital Chairman of the Board of Directors at Volga Gas, member of the board at Samarenergo and two Russian glass companies Education • Moscow Power Engineering University ⚫ PhD in Engineering Anton Poryadin Independent Non-Executive Director Experience and awards • 9 years' experience in corporate finance and asset management • Previously held position of senior equity portfolio manager at TKB BNP Paribas Investment Partners • In 2013 voted one of the top three portfolio managers in Russia by Thomson Reuters Extel Survey Education • St. Petersburg State University of Economics and Finance Robert Paul King Independent Non-Executive Director Experience and awards 18 years of experience in audit, 5 years - in construction industry • Runs his own development business in Portugal • Worked at Deloitte & Touche, KPMG and Ernst & Young in Russia, Kazakhstan and UK Education • University of Keele (1) Title granted by President of Russia Etalon Group Experience and awards 12 years of experience in strategy consulting at A.T. Kearney. Partner and Vice President at A.T. Kearney Worked at Barents International Markets B.V., Torno Internazionale S.p.A., St. Petersburg Foundation for Enterprise Development Education • SPb Technical University, Business School at the University Of Rochester Experience and awards 28 years of experience in the corporate governance and management of investment companies and funds Education BSc Honours degree in Geography and Geology 13#15Financial results Etalon Group#16Record deliveries in 2013 achieved! Deliveries, ths sqm 363 256 +29% 468 440 107 28 2012 2013 1H 2H 2013 project deliveries breakdown, sqm Project NSA delivered in 2013, ths sqm Tsar's Capital 72 Swallow's Nest 189 Letniy 64 Galant 11 House on Tukhachevskogo Street 25 Emerald Hills 107 Total 468 Source: Company data » Etalon Group Transfers y-o-y, sqm 240 912 +45% 349 793 2012 2013 Etalon Group successfully delivered on its construction plan in 2013, completing 468 ths sqm of NSA for the year, an increase of 29% compared to 2012 and an all-time record for Company. During 2013 Etalon delivered a total of 17 buildings containing 7,110 flats at ongoing projects including Tsar's Capital, Swallow's Nest, Galant, and Emerald Hills, as well as at Letniy and House on Tukhachevskogo Street, where the Company completed construction work. 15#17Robust top-line growth in both business segments Transfers to customers, sqm 240 912 +45% 349 793 FY 2012 FY 2013 Residential real estate development revenue, mln RUB Construction services revenue from third parties/external, mln RUB 19 424 +52% 29 548 4 782 +52% 7 256 FY 2012 FY 2013 FY 2012 FY 2013 Consolidated revenue increased by 48% in RUB, 44% in USD: Total Revenue, mln RUB Total Revenue, mln USD 26 894 +48% 39 921 FY 2012 FY 2013 Source: IFRS financial statements, Company information Etalon Group 866 +44% 1 251 FY 2012 FY 2013 average USD/RUB fx rate for the period 1 January 2012 -31 December 2012 average USD/RUB fx rate for the period 1 January 2013 31 December 2013 31.07 31.91 16#182013 FY Gross profit analysis Consolidated gross profit increased by 35% in RUB, 31% in USD Adjusted gross profit*, mln RUB Adjusted gross profit*, mln USD +35% 9,741 1 149 8 706 13,147 440 743 11 964 314 37 280 +31% Adjusted gross profit margin*, % 412 123 14 36% 23 33% -114 FY 2012 -4 FY 2013 FY 2012 FY 2013 ■Residential real estate development ■Construction services Other segments plus elimination of inter-segment profit Core business segment demonstrated healthy profitability trend 375 FY 2012 FY 2013 Residential real estate development adjusted gross profit*, mln RUB Construction services gross profit highly dependent on project pipeline Construction service gross profit, mln RUB 8 706 +37% 11 964 45% 40% FY 2012 Source: IFRS financial statements *Note 5 to IFRS financial statements FY 2013 » Etalon Group Residential real estate development adjusted gross profit*, mln RUB Adjusted gross profit margin*, % 239 475 256 ExpoForum 1st 772 stage revenue 623 recognition with higher margin 377 249 494 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 17#19Continued efficiencies in managing SG&A costs as well as FX exposure Selling, General and Administrative expenses, mln RUB Selling, General and Administrative expenses as % of revenue FX sensitivity 3 282 +27% 4 180 12,2% • 10,5% FY 2012 FY 2013 FY 2012 FY 2013 Typical project cost structure* Materials cost structure * (USD 375 550 per sqm of NSA) Crushed granite Sand Bricks 4% 4% 6% Cement 14% 20% • Company estimates that only c. 15% of total construction costs linked to USD Foreign currency denominated Debt to Cash ratio is 0.95 (as of 31 December 2013) Construction cost structure * (USD 900 1,200 per sqm of NSA) Overhead expenses Total cost structure (USD 1,800 2,200 per sqm of NSA) Design Project management * Interest expense Machinery Construction Materials 8% 4% 4% Sales costs 8% 6% 6% Other 7% 41% 52% Other 20% Wages 45% 23% Taxes Metal products *Source: Company estimates for typical project based on current portfolio average. Actual breakdown per project is subject to significant variation due to a number of factors. Etalon Group Infrastructure 8% 20% Land acquisition 18#20Vigorous growth in FY 2013 EBITDA and Net Income EBITDA, mln RUB EBITDA, mln USD EBITDA calculation mln RUB 2013 +36% +32% Comprehensive income 6,664 Income tax expense 1,833 295 9 430 223 Interest expense on loans and finance leases 233 6 931 Net foreign exchange loss 109 Interest income on bank deposits (583) Interest income on loans and receivables (28) Bank fees and commissions 80 FY 2012 FY 2013 FY 2012 FY 2013 Interest in COS 779 Depreciation EBITDA 343 9,430 Net Income, mln RUB mln RUB Net Income, mln USD 2013 +33% +30% Depreciation to COGS (Note 14 PP&E) Depreciation to selling expenses (Note 14 PP&E) 292 1 Depreciation to G&A (Note 14 PP&E) 39 6 664 5 000 209 161 Depreciation to Investment property (Note 15 Investment property) 11 FY 2012 FY 2013 FY 2012 FY 2013 average USD/RUB fx rate for the period 1 January 2012 - 31 December 2012 average USD/RUB fx rate for the period 1 January 2013 31 December 2013 31.07 31.91 Source: Financial statements Etalon Group 19#21Robust balance sheet Debt maturity profile (as of 30/06/2014; USD mln)* 66 97 131 Debt composition (as of 30/06/2014)* By type of facility 31 439 114 2014 2015 2016 2017 2018 - 2021 Total Net debt (as of 30/06/2014)*, USD mln 446 439 Cash (1) (1) Including bank deposits *Source: unaudited management accounts Etalon Group 66% By currency 11% 34% ■Local bonds ■ Bank loans RUB EUR 89% Financing highlights • Conservative approach to leverage • Balance sheet naturally hedged 7 Debt Net cash USD/RUB fx rate as at 30 June 2014 33.63 20 20#22Balanced Growth Strategy 90 89 255 80 IPO proceeds 70 0,34x 71 934 Organic portfolio value 60 growth as a result of IPO 50 55 184 proceeds investment 43 172 40 30 20 10 (1462) 0 (1482) 2010 (4897) (4482) 2010 2011 2012 2013 •FCF, mln RUB Open Market Value, mln RUB 15 10 443225050 45 1,53x 1,53x 1,49x 1,6x 1,4x 1,25x 1,2x 1,0x 0,8x 0,6x 0,4x 0,2x 0,0x 43225050 15 10 2010 2012 2013 2011 Working capital, bln RUB (lhs) Cash collections, bln RUB (lhs) Working capital to Cash collections ratio (rhs) Note: for FCF and Working capital detailed calculations please refer to pp. 47-48 (1) Jones Lang LaSalle land bank valuation report as of 31.12.2013 Etalon Group 1,04x 2010 0,5x 0,44x 0,44x 0,43x 0,5x 0,4x 0,4x 0,3x 0,3x 0,2x 0,2x 0,1x 0,1x 0,0x 2011 2012 2013 Working capital, bln RUB (lhs) Open Market Value, bln RUB (lhs) Working capital to Open Market Value ratio (rhs) 1,34x 1,31x 1,29x 1,4x 1,2x 1,0x 0,8x 0,6x 0,4x 0,2x 0,0x 2012 2013 2011 Working capital, bln RUB (lhs) I New Contract Sales, bln RUB (lhs) Working capital to New Contract Sales ratio (rhs) 21#23Key takeaways - Financial results Solid financial performance in FY 2013 . . Consolidated revenue up 48% year-on-year (y-o-y) to RUB 39,921 million from 26,894 million in FY 2012 EBITDA increased 36% y-o-y to RUB 9,430 million from RUB 6,931 million in FY 2012 Net income grew 33% to RUB 6,664 million, compared to RUB 5,000 million in FY 2012 Good costs discipline Tight control over costs throughout 2013, with general, administrative and selling expenses as a percentage of revenue decreased from 12.2% in 2012 to 10.5% for 2013 Strong financial position ⚫ Net cash position as at 30 June 2014 of USD 7 million • Cash and cash equivalents of USD 446 million • Etalon Group's comfortable debt repayment schedule combined with strong cash collections-based business model means company is well-positioned to continue implementing construction plan in line with guidance Etalon Group 22#24Operating results Etalon Group#25Robust operating results in 1H 2014 - a solid foundation for FY 2014 Number of contracts New contract sales, sqm New contract sales, mln RUB 3.002 1H 2013 +44% Cash collections, mln RUB +36% 4 333 1H 2014 153 523 +33% 203 994 1H 2013 1H 2014 New contract sales y-o-y, mln RUB 12 669 +36% 17 173 1H 2013 1H 2014 9 406 14 835 7 416 8 152 6 031 10 940 +36% 5 563 8 095 4 336 6 746 5 194 3 781 9 078 4 158 5 566 5 923 1H 2013 1H 2014 2011 2012 2013 2014 ■1Q 2Q ■ 3Q ■4Q Source: Company data Etalon Group 24#26Strong new contract sales growth in 2Q 2014 Number of contracts New contract sales, sqm New contract sales, mln RUB 1 548 +31% 2 033 2Q 2013 2Q 2014 Average price, apartments and commercial premises, RUB/sqm 88 435 +8% 80 042 +19% 94 934 6 746 2Q 2013 2Q 2014 Average price, total, RUB/sqm 95 920 84 286 +1% 85 271 2Q 2013 2Q 2014 2Q 2013 2Q 2014 Source: Company data Etalon Group 2Q 2013 +20% 8 095 2Q 2014 • • • Average down payment was 74% The 1% growth in total average price was influenced by an increased share of parking lots in the 2Q 2014 sales mix, as sales in a number of parking complexes were launched at the same time On an adjusted basis, average price per sqm grew 8% year-on-year in 2Q 2014 Share of Moscow Metropolitan Area contracts remained at a strong level of 21% in 2Q 2014 up from 19% in 2Q 2013 The regional sales network generated -40% of new contracts (see p. 8 for details) 25#27Better product mix drives new contract sales in 2Q 2014 2Q 2013 New contract sales by project, sqm 2Q 2014 New contract sales by project, sqm Etalon City Other projects House on Tukhachevskogo Other projects Street Emerald Hills Orbit 6% 5% 19% 6% Tsar's Capital 6% Letniy 8% Letniy 2% 3% Jubilee Estate 3% 3% Galant 4% Rechnoy 26% 8% Jubilee Estate 19% Molodejny 12% 9% Rechnoy 9% 13% Swallow's Nest Molodejny Swallow's Nest 20% 19% Emerald Hills Tsar's Capital +22% Significant portfolio diversification with growing share of prime location projects Tsar's Capital now accounts for 19% of new sales after the Company launched the long-awaited second stage at the end of 1Q 2014 Second stage of Etalon City, due to be launched at the beginning of 3Q 2014, is expected to boost sales at the project as the first stage is nearly sold out Number of MMA contracts 353 431 3 new project launches scheduled for 2H 2014 will continue to improve the product mix further 2Q 2013 2Q 2014 Source: Company data Etalon Group 26 26#28Mortgage deals - another driver of new contract sales Number of mortgage contracts Share of mortgage sales, % 362 +28% 464 2Q 2013 2Q 2014 23% 23% 2Q 2013 2Q 2014 • • Highlights Etalon Group offers mortgage programmes with major domestic and international banks, including Sberbank, VTB Group, Societe Generale (Rosbank), Raiffeisen Group and Absolut Bank Joint programmes established with 23 banks and special mortgage agencies to offer flexible financing options: • minimum down payment: 0 - 30% O years • maturity: 130 y • interest: ⚫ from 10.5% in RUB ⚫ from 10% in EUR Selected mortgage partners СБЕРБАНК ВТБ24 ГАЗПРОМБАНК Nb HOMOC БАНК РОСБАНК Х SOCIETE GENERALE CROUP Райффайзен БАНК Разница в отношении БАНК CAHKTO ПЕТЕРБУРГ Связь Банк БАЛТИНВЕСТБАНК Открытие Абсолют Банк УРАЛСИБ Банк • from 10.5% in USD • Despite the generally hawkish interest rate policy demonstrated by the Central Bank of Russia in 1H 2014, the average mortgage rate actually declined by 20 bps to 12.2% (1) (1) Based on CBR data for December 2013 and May 2014 Etalon Group 27#29Key takeaways - Operating results 1H 2014 operating highlights - a solid foundation for FY 2014 results • The number of new contracts increased by 44% year-on-year to 4,333 • • New contract sales amounted to 204 thousand sqm and RUB 17.17 billion, year-on-year increases of 33% and 36%, respectively Cash collections in 1H 2014 amounted to RUB 14,835 million, an increase of 36% year-on-year Deliveries increased 171% year-on-year to 76 ths sqm, precisely in line with the 2014 construction programme Net cash position of USD 7 million as of 30 June 2014 2Q 2014 operating highlights - continued growth in new contract sales and prices • • • . The number of new contracts in 2Q 2014 increased 31% year-on-year to 2,033 New contract sales amounted to 95 thousand sqm and RUB 8.1 billion, year-on-year increases of 19% and 20%, respectively Average down payments remained at a high level of 74% in the second quarter The increasing share of sales at prime location projects continued to drive new contract sales and higher average prices per sqm for residential and commercial premises, with average prices for apartments and commercial premises increasing 8% year-on-year to RUB 96 thousand per sqm Regional sales network contributed around 40% of new contracts in the second quarter 2H 2014 Outlook • • Phase II of Etalon City and three new projects due to launch in 2H 2014 should further diversify and strengthen product mix Construction programme remains on track, with deliveries of 580 ths sqm planned for 2014 Strong financial position leaves the Company well placed to continue acquiring new projects to secure long-term growth Etalon Group 28 28#302014 deliveries ✓ Etalon Group#31Summary of 2014 planned deliveries Project deliveries breakdown for 2014 NSA to be delivered in Project Region 2014, ths sqm 1 Emerald Hills MMA 131 2 Molodejny SPMA 108 3 Rechnoy SPMA 110 4 Tsar's Capital SPMA 106 5 Swallow's Nest SPMA 82 6 Galant SPMA 38 7 Etalon City MMA 5 Total 580 Source: Company estimates » Etalon Group 30 30#32Emerald Hills Planned 2014 deliveries: 131 ths sqm • • Delivered in 1H 2014: 42 ths sqm Total NSA of project: 862 ths sqm Etalon Group 31#33Etalon Group Molodejny Planned 2014 deliveries: 108 ths sqm • Total NSA of project: 112 ths sqm BBSBEBEEEEEEEEE EEE BBBBBBBBEEEBEBE BEEEEEEEEEEE 888BEEEEEE 32#34Rechnoy • Planned 2014 deliveries: 110 ths sqm Total NSA of project: 110 ths sqm Etalon Group 33#35Tsar's Capital Planned 2014 deliveries: 106 ths sqm • Total NSA of project: 390 ths sqm. Etalon Group Царская (Столица КВАРТИРЫ 380-05-25 Царская бо КОММЕРЧЕСКАЯ НЕДВИЖИМОсть Столица DewCneuCMY 380-05-25 34 ===#36Swallow's Nest Planned 2014 deliveries: 82 ths sqm Total NSA of project: 334 ths sqm 1 Etalon Group " " 35#37Etalon Group Galant • Planned 2014 deliveries: 38 ths sqm • Delivered in 1H 2014: 35 ths sqm Total NSA of project: 49 ths sqm 36 36#38Etalon City • Planned 2014 deliveries: 5 ths sqm • Total NSA of project: 430 ths sqm 37 Etalon Group#39Appendix EEEEELEE EEEEE IEEEE EELE Etalon Group EEEEEEE#40Underpenetrated residential real estate market in Moscow and St. Petersburg has great potential Growth rate for Moscow and St. Petersburg housing stock over last 7 years lags well behind other European countries, indicating huge potential for growth 2,5% Residential stock in Moscow is disproportionally low for the population's disposable income levels 3 000 Average annual growth of housing stock per capita in sqm(2) Czech Republic 2,0% Poland Latvia Russia 1,5% Bulgaria Slovakia Belarus Ukraine Hungary Lithuania 1,0% 0,5% Moscow 0,0% 10 112 SPB UK France ⚫Japan Denmark Germany 19,51 23,3 15 20 25 30 35 40 45 50 55 60 Housing stock per capita (sqm) in 2011(1) Population growth in Moscow and SPb has significantly outpaced delivery of new housing stock, while disposable income growth has also outpaced real estate prices, improving affordability and indicating significant potential demand Monthly gross disposable income per capita (USD) in 2011(1) 2 500 Austria Denmark France Finland Germany • Sweden • UK 2.000 231mln sqm Gap: 184mln sqm vs New'13: 3.1mln sqm (59x) 415min som Moscow 1 500 Gap: 29mln sqm vs New' 13: 2.6mln sqm (12x) 120min sqm 1 000 SPB Russia 500 Bulgaria 0 16 21 149min sqm Czech Republic Poland Latvia •Hungary ⚫ China 26 31 36 41 46 51 Housing stock per capita (sqm) in 2011(1) A- Potential housing stock - Total housing stock (latest) Mortgage to GDP ratio illustrates significant underpenetration and huge potential for growth in demand supported by higher borrowing levels Etalon Group City / region Population' 13 Cumulative (mln) growth'03-13 Monthly disposable income' 12 (USD) Cumulative growth'09-12 (RUB) Moscow 12.0 +16.6% 1,566 +52.2% Moscow region 7.0 +6.6% 956 +55.9% Moscow and region 19.0 +12.7% 1,348 +54.2% (MMR) SPB 5.0 +7.2% 895 +64.0% SPB region 1.8 +4.7% 577 +55.0% SPB and region (SSR) 6.8 +6.6% 818 +63.1% Other regions with 13.9 Etalon sales offices(3) (1.4%) 956 +41.7% Russia 143.3 (1.6%) 742 +55.1% Note: Average USD/RUB FX rates for 2011 and 2012: 29.4 and 31.1, accordingly; average EUR/USD FX rates for 2011 and 2012: 1.39 and 1.28, accordingly (1) 2012 data applied for Moscow (2) Based on 2005-2011 data for Russia, SPB and SSR; 2005-2012 - for Moscow and MMR; for other countries - average growth rates for available periods (3) Murmansk region, Krasnoyarsk region, Tyumen region, Khanty-Mansiyskiy autonomous district, Yakutia, Magadan region, Kamchatskiy krai, Khabarovkiy krai, Sakhalinsk region and Primorskiy krai Source: Rosstat, AHML, UN, OECD, Eurostat, HelgiLibrary, World Bank, Turkish Statistical Institute, NBP, IRN, St. Petersburg Real Estate Bulletin Etalon Group Mortgage/GDP (2011) Saint Petersburg 4,1% Moscow 2,2% Russia 2,9% Turkey 5,5% Czech Republic 13,0% Poland 19,6% Italy 22,9% Austria 27,8% France 42,4% Finland 42,7% Germany 45,3% Spain 62,1% Norway 68,6% 76,5% 78,1% ཙྭ ༔ ཚཱ ། 39 83,7% 100,9%#41Typical project cost structure Materials cost structure * (USD 375 550 per sqm of NSA) Sand * Construction cost structure (USD 900 - 1,200 per sqm of NSA) Overhead expenses Total cost structure * (USD 1,800 2,200 per sqm of NSA) Machinery Materials 8% 8% 41% 52% Other Crushed granite Cement Bricks 4% 4% 6% 14% O Metal products 20% Typical project lifecycle* Task Share,% Start, month Duration, month Predevelopment 3 0 8 Zero cycle works 7 2 10 Construction works 43 5 20 Facade works 11 16 10 Fit out works 5 18 10 MEP systems 14 7 21 Engineering facilities Urban landscaping 15 2 5 24 23 6 23% 20% Wages Construction 45% Taxes 0 5 Design Project management Interest expense 4% 4% 6% Sales costs 6% Other 7% 8% Infrastructure 20% Land acquisition Construction timeline, month 10 *Source: Company estimates for typical project based on current portfolio average. Actual breakdown per project is subject to significant variation due to a number of factors. Etalon Group 15 20 20 25 30 40 40#42Residential development scheme Timing 3-5 years Total development period range: 39-59 months 12-18 months Permission risk vs. Project value High permission risk Low entry price Medium-low permission risk Medium entry price Stages of residential real estate development Zoning & initial permit documentation Revenue recognition Source: Company data Etalon Group Investment contract, planning & construction permit 18-30 months Construction Pre-sale 1-2 months 3 months State commission Ownership rights registration Sales after commission ing For share participation agreements when the construction is completed and the building has been approved by the State commission for acceptance of finished buildings. For share accumulation agreements when the building has been approved by the State commission for acceptance of finished buildings and act of acceptance is signed by share accumulation cooperative. For 100% payment when sale- purchase agreement is signed. For less than 100% payment when preliminary agreement and act of acceptance is signed by client. Etalon Group focus 41#43Strong corporate governance and shareholding structure Corporate governance structure General Shareholders Meeting Board of Directors • Chairman (V. Zarenkov) • 4 Executive Directors 5 Non-Executive Directors, including 3 Independent Directors Source: Company data Shareholding structure 1,0% 30,8% Board Committees 44,1% Strategy Committee 16,4% 7,7% Nomination & Remuneration Committee Management Team Audit Committee Zarenkov family Management Baring Vostok Free float Etalon Development Ltd. Etalon Group As of 30 June 2014 42#44Construction services Description • Etalon Group is a leader in industrial construction in the North-West region of Russia with superb track record throughout its history Track-record •We have contributed to 15 milestone projects • Heat & power station, two hotels, four car assembly plants, shipyards, machinery plant, fitness and sports center etc. Strategy • 12 projects under way • Etalon Group plans to continue developing its industrial construction operations and maintain its share in total business Diversification benefits • Ability and expertise to provide quality construction services to well-known international and local companies facilitates Group's brand development • Allows to maintain skilled work force during market downturn Selected key projects Toyota Poling and gridding Nissan TOYOTA Infrastructure & site for the finished good ExpoForum Ford GM Design & construction (increase of production capacities) Poling & road infrastructure construction Pulkovo customs Admiralty Shipyards Construction of workshop & transportation utilities North-West Heat & Power Station Full construction cycle Foundation construction for a cooling tower and main building Full construction cycle Almazov Medical Complex Renovation of the existing building and building up two additional floors Etalon Group 43 43#45Income statement mln RUB Revenue 2010 2011 2012 2013 20,316 22,741 26,894 39,921 Cost of sales (11,078) (11,888) (17,494) (27,553) Gross profit 9,238 10,853 9,400 12,368 General and administrative expenses (2,047) (2,328) (2,324) (3,157) Selling expenses (589) (854) (958) (1,023) Other expenses, net (177) (27) (209) (40) Results from operating activities 6,425 7,644 5,909 8,148 Finance income 284 1,441 749 691 Finance costs (667) (60) (132) (342) Net finance income (costs) (383) 1,381 617 349 Share of profit of equity accounted investees (net of income tax) Profit before income tax 6,042 9,025 6,526 8,497 Income tax expense (1,355) (1,585) (1,526) (1,833) 4,687 7,440 5,000 6,664 Profit for the period Profit attributable to: Owners of the Company Non controlling interest Profit for the period Source: audited consolidated IFRS accounts for 2010, 2011, 2012, 2013 → Etalon Group 4,628 7,332 4,979 6,629 59 108 21 35 4,687 7,440 5,000 6,664 44#46Balance sheet mln RUB Assets 2010 2011 2012 2013 mln RUB 2010 2011 2012 2013 Equity and Liabilities Non-current assets Equity PP&E Investment property Other long-term investments 39 88 1,660 2,009 2,380 1,962 Share capital 1,952 1,142 Retained earnings 10,157 88 60 60 275 Total equity attributable to equity 12,109 holders of the Company 14,980 14,967 14,967 17,704 22,688 29,332 32,684 37,655 44,299 Trade and other receivables 904 551 433 1,332 Non-controlling interest Total equity 459 12,568 372 33,056 408 38,063 387 44,686 Deferred tax assets 263 679 434 560 Non-current liabilities Other non-current assets 33 92 11 10 Long-term debt 6,702 8,456 12,811 10,176 Total non-current assets 2,899 3,419 3,318 5,281 Long-term trade and other payables 261 48 980 785 Current assets Provision 81 77 65 89 Deferred tax liabilities 40 98 226 826 Inventories 25,651 32,047 41,522 50,057 Total non-current liabilities 7,084 8,679 14,082 11,876 Trade and other receivables 3,964 7,473 11,058 15,078 Current liabilities Short-term investments 341 1,327 6,870 5,008 Loans and borrowings 1,424 Cash and cash equivalents 3,636 14,484 10,716 8,139 Other current assets Total current assets 58 33,650 Total assets 36,549 34 32 7 55,365 70,198 78,289 58,784 73,516 83,570 Trade and other payables Provisions Total current liabilities Total equity and liabilities 1,950 3,043 14,284 13,539 16,966 22,300 1,189 1,560 580 1,665 16,897 17,049 21,371 27,008 36,549 58,784 73,516 83,570 3,825 Source: audited consolidated IFRS accounts for 2010, 2011, 2012, 2013 » Etalon Group 445#47Cashflow statement mln RUB 2010 2011 2012 2013 mln RUB 2010 2011 2012 2013 Operating Activities Investing Activities Profit for the period 4,687 7,440 5,000 6,664 Proceeds from disposal of non-current 31 117 71 15 assets Adjustments for Depreciation and Interest received 93 140 552 611 286 265 417 343 amoritasation Acquisition of PP&E (329) (726) (844) (431) Gain/(loss) on disposal of (1) (92) (49) (15) Loans given (106) (253) (371) (55) PP&E Loans repaid 61 234 363 85 Loss on disposal of subsidaries 5 1 28 Gain/(loss) on disposal of Acquisition of subsidiaries, net of cash acquired 9 10 (24) other investments Finance income (cost), net 490 (1,425) (544) (337) Disposal of subsidiaries, net of cash disposed of (37) (17) (8) (20) Income tax expense 1,355 1,585 1,526 1,833 Acquisition of other investments Cash from operating activities 6,822 7,750 6,378 8,488 before changes in working Net cash used in investing activities Financing activities (277) (1,027) (5,506) (555) 1,606 (1,532) (5,743) 1,821 capital Proceeds from IPO 13,487 Change in inventories 1,520 (5,308) (7,633) (7,837) Change in accounts receivable (201) (2,893) Change in accounts payable (6,659) (818) Change in provisions (736) 367 (3,024) (5,080) 4,074 4,880 (992) Acquisition of non-controlling interest Proceeds from disposal of non-controlling interest (97) (3) (3) (10) 24 1,109 Proceeds from borrowings Change in other currents (33) 24 3 25 Repayments of borrowings assets Acquisition of own shares 10,794 6,353 12,140 (8,620) (4,821) (5,552) (9,668) (459) (13) 5,937 Income tax paid Interest paid Net cash provided by operating activities (1,083) (1,897) (1,833) (907) (814) (1,098) (1,097) (1,724) (1,184) (3,873) (4,124) (1,046) Dividends paid (38) Net cash (used in) from financing activities 2,039 14,581 6,572 (3,741) Net increase (decrease) in cash and cash equivalents 300 9,176 (3,295) (2,966) Source: audited consolidated IFRS accounts for 2010, 2011, 2012, 2013 Etalon Group Cash & cash equivalents at the end of the period 3,636 14,484 10,716 8,139 46#48EBITDA calculation EBITDA mln RUB 2010 2011 2012 2013 Comprehensive income 4,687 7,440 5,000 6,664 Income tax expense 1,355 1,585 1,526 1,833 Interest expense on loans and finance leases 602 10 7 233 Net foreign exchange loss 65 (1,168) 125 109 Interest income on bank deposits (89) (140) (543) (583) Interest income on loans and receivables (4) (6) (9) (28) Interest income on promissory notes Gain on repurchase of CLNs Bank fees and commissions 126 (9) 16 46 67 80 Interest in COS Depreciation 169 341 779 286 265 417 343 EBITDA 6,909 8,201 6,931 9,430 2010 2011 2012 2013 Depreciation to COGS (Note 14 PP&E) 242 239 385 292 Depreciation to selling expenses (Note 14 PP&E) 2 1 1 1 Depreciation to G&A (Note 14 PP&E) 42 25 31 39 Depreciation to Investment property (Note 15 11 Investment property) Etalon Group 47#49Working capital calculation Working capital calculation mln RUB 2010 2011 2012 2013 Total inventory 25,651 32,047 41,522 50,057 Current part + Trade and other receivables 3,964 7,473 11,058 15,078 - Trade and other payables 14,284 13,539 16,966 22,300 1,189 1,560 580 1,665 - Provisions Non-current part + Trade and other receivables - Trade and other payables - Provisions Adjustments - Cumulative borrowing costs capitalized during the period (Note 12 Finance income and finance costs) 904 551 433 1,332 261 48 980 785 81 77 65 89 320 1,482 2,725 4,092 + Cumulative borrowing costs that have been included into the cost of sales (Note 12 Finance income and finance costs) 169 510 1,289 -Income tax receivable (Note 19 Trade and other receivables) 56 72 310 103 +Income tax payable (Note 26 Trade and other payables) 367 447 7 248 Working capital 14,695 23,909 31,904 38,970 Etalon Group 48#50FCF calculation FCF calculation mln RUB Comprehensive income Adjustment for: 2010 2011 2012 2013 4,687 7,440 5,000 6,664 Depreciation 286 265 417 343 Gain on disposal of PP&E (1) (92) (49) (15) Loss on disposal of subsidiaries 5 1 28 Gain on disposal of equity accounted investees (24) Finance income, net 490 (1,425) (544) (337) Income tax expense 1,355 1,585 1,526 1,833 Income tax paid (1,083) (1,897) (1,833) (907) Interest paid (814) (1,098) (1,097) (1,724) (Increase)/Decrease in working capital (6,109) (8,628) (7,572) (6,903) (Increase)/Decrease in invested capital (298) (609) (773) (416) FCF (1,482) (4,482) (4,897) (1,462) (Increase)/Decrease in working capital based on 2010 2011 2012 2013 CF statement Change in inventories 1,520 (5,308) (7,633) (7,837) Change in accounts receivable (201) (2,893) (3,024) (5,080) Change in accounts payable (6,659) (818) 4,074 4,880 Change in provisions (736) 367 (992) 1,109 Change in other current assets (33) 24 3 25 Working capital change (6,109) (8,628) (7,572) (6,903) (Increase)/Decrease in invested capital based on 2010 2011 2012 2013 CF statement Acquisition of pp&e (329) (726) (844) (431) Proceeds from disposal of non-current assets 31 117 71 15 Invested capital change (298) (609) (773) (416) Etalon Group 49#51Etalon Group Limited Ogier House St Julian's Avenue St Peter Port Guernsey GY1 1WA → Etalon Group Tel: +44 (0)20 8123 1328 Fax: +44 (0)20 8123 1328 Email: [email protected] 50 50