#1Investor presentation May 2012 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 assessing the Presentation, you unconditionally agree to be bound by the following terms, conditions and restrictions, including any modifications to them any time that you receive any information from Etalon Group Limited ("Etalon Group" or the "Company") as a result of such access. This Presentation has been prepared by 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 Company in any jurisdiction or an inducement to enter into investment activity. 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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 for products; 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. 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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 01 This Presentation is not directed to, or intended for distribution to or use by, any person or entity that a citizen or resident located in any locality, state, country or other jurisdiction where such distribution, Kassian Federation oi m any other Jansarctio publication availability مطالب ilation or which would require registration.#3Today's presenting team Viacheslav Zarenkov Chairman of the Board of Directors Founding shareholder and President of Etalon Group Founded Etalon in 1987 Anton Evdokimov CFO of Etalon Group With Etalon Group since 1988 Dmitri Boulkhoukov Head of Investments of Etalon Group Alexander Shkuratov Head of Strategy and Business With Etalon Group since 2007 Development of Etalon Group With Etalon Group since 2007 > Etalon Group 02 10#4Agenda 2 4 At a glance Etalon Group New acquisitions and 2012 eight step programme 1Q trading & operating update BEB E BE Key takeaways 03#51. At a glance 04 Etalon Group#6• • At a glance • Presence in rapidly growing markets Focus on "Golden Triangle" of Moscow, Greater Moscow Area and St. Petersburg Leader in St. Petersburg* real estate market with c. 11% market share(1) Dominant player in "comfort class" in Russia Strong delivery track record Liquidity and credit ratings • Secure liquidity position supported by pre-sales cash collections Low leverage: 0.6x Net debt / EBITDA as of 31.12.2010 (2), Net cash = US $167 mln as of 31.12.2011 Credit rating by S&P's: B/Stable/B (3) Rapidly expanding projects portfolio Land bank of 3.25 mln sqm (equivalent of c. 16 Empire State Buildings) Market Ticker ETLN:LI USD 1,661 mln capitalization (18.05.2012) Share price USD 5.30 (18.05.2012) Portfolio composition Total unsold NSA breakdown • 3.0 mln sqm commissioned since . inception in 1987 25 years of construction & development experience True vertical integration • All stages of development cycle . • Land bank sufficient until 2017 Projects portfolio focused on cash-flow generation . Focus on comfort class segment Land bank secured to 2x delivery volume by 2012 and 4x by 2014 Large-scale multi-phase projects Country-wide sales network 40 business units with c. 4,000 people * St Petersburg metropolitan and Moscow metropolitan areas respectively (1) Average annual market share of total residential completions in the private sector (excluding individual construction) between 2000 and 2011 in St. Petersburg; (2) Net debt as of 31.12.2010, EBITDA for 2010; based on audited consolidated IFRS accounts of Etalon Group; (3) 'B' long-term & 'B' short-term corporate credit ratings of SSMO LenSpetsSMU with 'Stable' outlook (last reconfirmed on 10.01.2012); Corporate governance 10 BoD members, five NEDS Fully accomplished Board of Directors with appropriate representation of interests of all investor groups Quarterly trading updates and semi- annual financial reporting Official guidance on deliveries and new contract tales Etalon Group 45% ■SPMA as of 31.12.2011 ■MMA as of 31.12.2011 55% 1% 1% 43% 55% ■Residential under construction ■Residential design stage ☐ Completed residential ■Standing commercial 05 55#7Strong financial performance Revenue (USD min) Net profit and EBITDA (USD min) 300 279 55% -23% -16% 774 253 239 50% 63 250 227 669 636 60 36 58 54 52 64% 45% 200 162 154 40% 38% 150 659 36% 35% 541 555 34% 100 30% 50 25% 2009 2010 2011 0 20% 2009 2010 2011 ■ Other (1) ■Construction services to 3rd parties ■Residential Development Source: audited consolidated IFRS accounts for 2008, 2009, 2010, 2011 Average USD/RUB fx rate in 2010 Average USD/RUB fx rate in 2011 30.38 29.39 (1) Includes 'Other operations' reporting segment (selling of construction materials, construction of stand-alone premises for commercial use and various services related to sale and servicing of premises) and 'Other revenues' (reflect revenues from operations not classified under any of the three reporting segments) (2) EBITDA is defined as profit (loss) for the period before interest and related income (expenses), income tax expense, depreciation and amortization ୬ Etalon Group EBITDA Net profit EBITDA margin % 90 06#8Robust balance sheet Debt cash flows maturity profile (as of 31/12/2011; USD mn) 40 67 102 71 83 323 2012 2013 2014 2015 Total Net cash (at 31/12/2011), USD mn 167 Net cash 323 490 • Debt Debt composition (as of 31/12/2011) By type of facility By currency 0.0% ■ Bank loans 22.3% 14.0% ■RUR LPN 36.9% 34.5% ■Local Bonds USD 40.8% ■Loans from other parties 51.5% - EUR Financing strategy • Longer debt maturities (3-5 years) • Decrease the cost of funding Conservative approach to leverage, less than 2.0 net debt/EBITDA Cash End of period USD/RUR fx rate at 31 December 2011 End of period EUR/RUR fx rate at 31 December 2011 32.20 41.67 (1)Includes bank deposits from ST Investments line (Note 19 of Financial statements) ୬ Etalon Group 07#95 Year programme based on existing land bank Sufficient land bank to increase deliveries 2x by 2012 and 4x by 2014 Projects scheduled for delivery in 2012 1200 IPO proceeds I I Project 1 Etude NSA, sqm 22,784 1000 2 Prestige 21,404 800 836 810 830 3 Jubilee Estate 78A building 2, 5 96,235 5 Orbit buildings 2, 3, 4 138,750 600 583 485 Actual delivery 400 6 Emerald Hills stage 2 107,602 487 413 +57% 386 323 328 200 209 Total I 386,775 I 0 TU Proven 2008 2009 2010 2011 2012 2013 capacity 2014 2015 2016 ! =2008 St Petersburg +2011 MMA deliveries Actual ■Impact of projects to be acquired in 2012-2013 Source: company estimates, JLL report as of 31.12.2011 Construction program (acquired projects) Etalon Group 08 80#10Project portfolio time line Construction period Project 2011 2012 2013 2014 2015 2016 and Status Total NSA (*000sqm) Unsold NSA (Etalon's OMV (US$mn) Unsold Construction Outstanding beyond share) parking (lots) budget (US budget (US $mn) $mn) ('000 sqm) St. Petersburg 1 Jubilee Estate 2. Orbit 3. Etude 4.Prestige 5. Lastochkino gnezdo 6. Letniy 7. Rechnoy 8. Galant 9. Molodejny 10. Samotsvety 11. Tsarskaya stolitsa 12. Moskovsky 13. Marshala Tukhachevskogo 14. Galactica Completed and unsold residential developments Completed stand-alone commercial properties Total SPMA Construction 602 242 448.6 1,375 738 31 Construction 207 88 114.7 908 233 82 Construction 23 7 13.3 138 23 5 Construction 21 13 33.9 96 42 8 Construction 319 318 50.1 1,950 387 382 Construction permit 71 71 25.6 604 86 86 Construction permit 108 92 22.3 688 125 125 Construction permit 56 56 28.1 123 91 91 Construction permit 96 96 32.5 678 109 109 Planning permit 187 187 63.4 865 311 310 Planning permit 459 358 129.5 1,638 793 793 Planning permit 253 253 118.6 1,286 408 408 Construction permit 30 30 n/a n/a n/a n/a Planning permit 680 n/a n/a n/a n/a n/a 1,133 30 46.3 623 0 0 39 6 41.7 0 0 0 4,284 1,847 1,168.6 10,972 3,346 2,430 Moscow 1. Emerald Hills 2. Etalon-City 3. Dmitrovskoe shosse 4. Prospekt Budennogo Total MMA Construction 884 779 342.2 4,463 1,132 978 Planning permit 381 364 99.6 4,019 576 576 Planning permit 357 285 103.4 2,584 538 531 Planning permit 40 40 n/a n/a n/a n/a 1,662 1,468 545.2 11,066 2,246 2,085 Total Etalon Group 5,946 3,315 1,713.8 22,038 5,592 4,515 Source: company estimates, JLL report as of 31.12.2011 Etalon Group 09 90#112. New acquisitions and 2012 eight step programme 010 Etalon Group#12New project acquisition in Moscow: Prospekt Budennogo Location 3.5 ha. land plot located in Sokolinaya gora district (Eastern administrative division of Moscow) The site is close to shosse Entuziastov, Izmailovskoe shosse and prospekt Budennogo, which puts the centre of Moscow 40 minutes away by car. Metro station Shosse Entuziastov and a number of bus stops are within 10 minutes walk • Expected NSA of the project is 40 ths sqm • Etalon Group acquired the project by purchasing the legal entity that holds the land rights • Etalon Group plans to begin construction in 2H 2013 and deliver in 2016 > Etalon Group 011#13New project acquisition in St. Petersburg: Marshala Tukhachevskogo Location 1.1 ha. land plot located in Krasnogvardeiskiy district of St. Petersburg The site is close to the "50th anniversary of October" park and just fifteen minutes by car from the central district of St. Petersburg Expected NSA of the project is 30 ths sqm Etalon Group acquired the project by purchasing the legal entity that holds the land rights • Etalon Group plans to begin construction in 2H 2012 and deliver in 2014 Etalon Group 012#14New project acquisition in St. Petersburg: Galactica • The project is unique in that it combines large scale with a close-to-centre location Location • Project NSA is 680 ths sqm • The project consists of 6 phases. Etalon Group plans • to begin construction in 2014 and complete in 2020 Cash collections are expected at USD 2.2 billion • Project Galactica will create an entirely new comfort- class residential district Master Plan > Etalon Group E BALTA M PM 013#15Project Galactica Etalon Group ANMMMMMX Moskovskiye Vorota metro station Project site Frunzenskaya metro station Moskovskiy prospekt Varshavskiy Express shopping centre Baltiyskaya metro station 014#16St. Petersburg Project Galactica 1. Vasilievesky Island 7km 2. Peter & Paul Fortress 7km 3. Nevsky prospect 3.5km 4. Winter Palace 4km 5. St. Isaac's Cathedral 6. Moscow Gate 3km 1km 7. Pulkovo Airport 15km 8. House of Soviets 5km M 3 8 015#17Project Galactica • • Land plot area: 38 ha NSA 680 ths sqm 6 stages of construction ⚫ 22 residential buildings up to • • • ● • 18 floors Expected number of flats: 8,700 Estimated number of residents: 22,000 Construction period: 2014-2020 Social infrastructure: 3 kindergartens and 3 schools will be located on the territory of the project Etalon Group 111 016#18NSA, ths sqm A2 Tsarskaya stolitsa [A3 Galant 2012 eight step programme will drive 2014 deliveries New projects scheduled for launch in 2012 Project A1 Lastochkino gnezdo Project B1 Lastochkino gnezdo B2 Tsarskaya stolitsa B3 Galant Projects scheduled for delivery in 2014 NSA to deliver, ths sqm - 240 319 106 I 459 28 56 B4 Molodejny 96 IA4 Molodejny 96 B5 Marshala Tukhachevskogo 30 A5 Marshala Tukhachevskogo 30 B6 Moskovsky 84 A6 Rechnoy 108 B7 Emerald hills (already in process) 156 A7 Letniy 71 A8 Etalon-City Total Projects in SPMA 381 B8 Samotsvety 1,520 Total 90 830 Projects in MMA A5 B5 B8 A2 B2 A4 B4 A3 B3 A1 B1 A6 A7 Etalon Group B7 A8 017#19Launch of sales in 2012 Tsarskaya stolitsa Lastochkino gnezdo Deliveries in 2014 Tsarskaya stolitsa Lastochkino gnezdo SPMA, NSA: 459 ths. sqm SPMA, NSA: 319 ths. sqm SPMA, NSA: 106 ths. sqm SPMA, NSA: 240 ths. sqm Molodejny Galant Molodejny Galant SPMA, NSA: 96 ths. sqm SPMA, NSA: 56 ths. sqm SPMA, NSA: 96 ths. sqm SPMA, NSA: 28 ths. sqm Rechnoy Marshala Tukhachevskogo SPMA, NSA: 108 ths. sqm SPMA, NSA: 30 ths. sqm Etalon-City Letniy | Marshala Tukhachevskogo Samotsvety SPMA, NSA: 30 ths. sqm SPMA, NSA: 90 ths. sqm Emerald Hills Moskovskiy MMA, NSA: 358 ths. sqm SPMA, NSA: 71 ths. sqm MMA, NSA 186 ths. sqm SPMA, NSA: 84 ths. sqm Etalon Group 018#20New acquisitions will secure production until 2018- 2019 Projects in St. Petersburg Metropolitan Area 4 11 8 3 12 6 Projects in Moscow Metropolitan Area อ 13 Emerald Hills NSA: 884 ths. sqm Development period: 2008-2016 9 5 *Moscow metropolitan and St Petersburg metropolitan areas respectively (1)Project numbers in square correspond to the projects in the table at page 9 Etalon Group Completed 3 Dmitrovskoe shosse NSA: 357 ths. sqm Development period: 2011-2016 # Under construction (1) 7 # Design stage (1) # Newly acquired projects In the course of DD 2 and negotiations 4 Prospekt Budennogo NSA: 40 ths. sqm Development period: 2013-2016 E Etalon-City NSA: 381 ths. sqm Development period: 2011-2016 019#213. 10 trading update 020 Etalon Group#22Robust new contract sales dynamics, still below pre-crisis levels New contract sales, ths sqm 120 100 107 80 60 40 +58% 60 +30% . 78 20 38 30 0 1Q 2008 1Q 2009 1Q 2010 1Q 2011 1Q 2012 (St. Petersburg only) Share of regional sales 40% Significant growth of key sales metrics Share of mortgage contracts reached 10%, up from 6% in 1Q 2011 • Average downpayment reached 72%, up from 66% in 1Q 2011 (significantly above the average of 50% envisaged by the business model) • Share of MMA* contracts reached 14% 1Q 2012 operating results 1Q 2012 1Q 2011 Change 37% 30% 34% 35% % 34% 29% New Sales, sqm 77,726 59,638 30% 20% New sales, mnRUR 5,566 4,158 34% 10% 0% Average price, RUR/sqm 71,611 69,721 3% 1Q 2008 1Q 2009 1Q 2010 1Q 2011 1Q 2012 * Moscow metropolitan area Etalon Group 021#23Expect 25% growth in new contract sales in 2012 New sales contracts, ths sqm 500 400 437 300 200 100 0 2008* +25% +27% 337 +33% 270 212 160 2009 2010 2011 F2012 * Annualized new contract sales based on 1H 2012, St. Petersburg only Construction programme, ths sqm 1200 1000 800 830 836 810 600 400 486 413 200 386 323 328 209 0 ୬ 2008 2009 2010 2011 2012 2013 2014 2015 2016 I Impact of projects to be acquired in 2012-2013 | Construction programme, based on acquired projects Actual Etalon Group Highlights ⚫ Further improving transparency by initiating guidance on new contract sales, on top of official guidance on deliveries • . Expect new contract sales to increase by 25% in 2012 This will be driven by new projects that will be launching towards the end of the year & strong sales on current projects Significant drop in deliveries both in MMA and SPMA in last 3 years have resulted in limited supply, especially in "comfort class", while demand is rapidly approaching pre-crisis levels 022#24Joint programs established with major banks, yet modest dependency on mortgages due to flexible pre-sale installment plans Share of mortgage sales,% 12% 10% 11% 8% 6% 6% 4% 2% 0% СБЕРБАНК РОССИИ ВТБ24 ГАЗПРОМБАНК 10% 10% 7% РОСБАНК Райффайзен БАНК Разница в отношении JIC HOMOC БАНК 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 Highlights • We offer mortgage programs with major domestic and international banks, including Sberbank, VTB Group, Societe Generale (Rosbank), Raiffeisen Group and KBC Group (Absolute Bank) Joint programs are established with 17 banks and offer flexible financial options: - down payment: 10-30% - maturity: 1-30 years - interest: from 10% in Euro from 7.9% in RUR from 10.5% in USD БАНК САНКТ- ПЕТЕРБУРГ Абсолют Банк Связь Банк И ПЕТРОВСКИЙ БАНК БАЛТИНВЕСТБАНК ИНВЕСТИЦИОННЫЙ ТОРГОВЫЙ БАНК УНИКОМ ВАНИ МИРАФ БАНК УНИВЕРСАЛЬНАЯ ИПОТЕЧНАЯ КОМПАНИЯ EBPOTPACT • We enjoy modest dependency on mortgage financing for our flexible pre-sale installment plans Etalon Group Открытие Dc открытое иционерное общество ХАНТЫ-МАНСИЙСКИЙ БАНК 023#25Orbit Pre-sales rate: 86% of total* NSA (excluding parking) Delivery: 2Q 2012 NSA: 207 ths sqm * Relates to buildings scheduled for delivery in 2Q 2012 FM 360 Etalon Group 024#26Prestige Pre-sales rate: 51% of total NSA (excluding parking) Delivery: 2Q 2012 NSA: 21 ths sqm Etalon Group 025#27Etude Pre-sales rate: 86% of total NSA (excluding parking) Delivery: 2Q 2012 NSA: 23 ths sqm Etalon Group 026#28Key takeaways CFA BAL Etalon Group CCC 00 027#29Key takeaways Three new project acquisitions in-line with IPO strategy Galactica - St. Petersburg - c. 680 ths sqm of NSA Prospekt Budennogo - Moscow - c. 30 ths sqm of NSA Ulitsa Tukhachevskogo - St. Petersbury - c. 40 ths sqm of NSA Start of 2012 eight step programme to secure 2014 deliveries Plan to launch sales on eight projects with total NSA of 1.5 million sqm, which will be delivered in the next 2-3 years - Lastochkino Gnezdo marks first “step", with 319 thousands sqm of NSA, launched with phenomenal 22% of NSA of Stage I contracted as of 16 April 2012 via waiting list & actual sales Six out of eight projects (including Emerald Hills) will account for 79% of 2014 deliveries, with two new projects due to launch next year, giving investors excellent visibility on 2014 deliveries Strong performance on contract sales New contracts sales reached 78 thousand sqm and RUR 5.6 billion, a year-on-year (y-o-y) increase of 30% and 34%, respectively, yet still below pre-crisis levels of 107 thousand sqm in 1Q 2008 in St. Petersburg alone Share of mortgages reached 10%, vs. 6% in 1Q 2011 Average down payment was 72%, vs. 66% in 1Q 2011 (well above target of 50%) Regional sales, a stable source of demand even through last crisis, remained strong at 34% of total Share of MMA continued to increase Share of contracts in the Moscow Metropolitan Area ("MMA") reached 14% MMA projects account for 45% of Etalon Group's landbank as of 31 December 2011 Strong balance sheet position to benefit from higher quality deal flow - USD 490 million* of expansion capital on balance sheet and low debt levels Solid growth in new contract sales expected in 2012, to increase by 25% up to 337 thousands sqm We believe Etalon is well positioned to acquire more high-quality projects in order to create additional value for our shareholders Land bank sufficient till 2017 *as of 31 Dece²sm of NSA as at 31 December 2012, the equivalent of approximately 16 Empire State Buildings ୬ Etalon Group 028#30Appendix Etalon Group 029#31Multiple generations of growth opportunity MMA and SPMA are the most attractive residential markets in Russia MMA & SPMA - most populated Russian regions... Total: 142mn(4) Potential demand estimation (ths. households) Total # of households in target market 6300 22mn 12% Potential demand estimation (mn sgm) 1700 8000 85% Households with income within target price-range 1852 Lower income Higher income 60% (7) ■MMA SPMA Other Households planning to improve living conditions 1111 Satisfied households ..with growing demand for residential real Population growth/ (decline) in 2007-2010(4) 56% (8) Households with preference for primary market 622 Secondary preference 1.3% Indicative 0.6% 0.4% potential market(3) 622 Regional demand ■Investment demand ■Secondary prefernce MMA SPMA Other 35 30 42202250 Opportunity gap 15 10 5 3.3 2.7 3.2 2.6 2.7 2008 betiveries 2009 2010 2011 households * 75 sqm = 46.7 mn sqm Potential demand 622 The above set of simple assumptions further supports the existence of significant unsatisfied demand for value-added housing in MMA and SPMA (1)Company estimates based on Rosstat's methodology and data; includes additional demand from mortgage users share of sales with mortgage in total sales is 12%, according to MER (assuming no overlap between mortgage and instalments customers); (2)1H2010 new supply volume of Middle Class residential properties on the primary market, according to MIAN and SPb Realty, converted from sqm into housing units, assuming that 1 flat = 85.3 sqm (average flat size in Russia in 2009, Rosstat)); (3)The demand structure shown on the pie chart is for indicative purposes; (4) Rosstat data as of January 2010; (5) Residential real estate commissioning, excluding individual construction; (6)Calculated as residential real estate commissioning volume in 2009 (excluding individual construction) multiplied by average real estate RUR prices on the primary market in 2009 and divided by end of period official CBR RUR/US$ exchange rate in 2010 (RUR/US$ 30.5); (7)60% of households plan to improve living conditions (source Rosstat; Comcon, 2010); (8)56% of consumers prefer primary vs. secondary residential real estate market (Source -Metrinfo survey in Moscow, 1H 2010) Etalon Group SPMA MMA 030#32Unique price, product and market combination Etalon Group is attractively positioned in high quality, yet affordable real estate segment Real estate price segments of presence vs. competitors MMA SPMA Regions PIK SU-155(1) LSR SU-155(1) RGI International PIK SU-155(1) Supply structure by volume(2) (2H 2010) St. Petersburg 9% 14% Total: 1.1mn sqm LSR 77% LSR Moscow 10% RGI International Total: 1.9mn sqm Etalon Group 46% Sistema-Hals 44% Mirland Don-Story(1) Inteco (1) Lower Medium Upper Lower Medium Economy Class Upper Medium Class Panel Premium Class 1% 5% 94% Moscow Region Total: 13.7mn sqm Poured concrete Economy class Middle class ■Premium class • Etalon Group is positioned in Upper Economy Class and Lower Middle Class - market segment with fewer number of competitors Economy Class and Middle Class price segments dominate both SPMA and MMA real estate markets, with marginal share of premium class Competitive pricing combined with upscale poured concrete technology is able to target a very wide universe of customers . (1) Non-public peers (2) Based on the total area of residential apartments available for sale on primary market at the end of 2H 2010 Etalon Group 031#33Nationwide sales & marketing network supports sustainable contracting Powerful sales network across the country Regional population actively buys apartments in Moscow and St. Petersburg Murmansk Monchegorsk SPMA Arkhangelsk Etalon Group's regional sales geography (2010) (2) Region Leningrad region Khanty-Mansijsk AD Yamalo-Nenets AD Kamchatsky Krai Share in sales 3.9% 3.2% 2.0% 1.9% Naryan-Mar (Nenetskiy AD) Cherepovets Yaroslavl Sakhalin region 1.2% ● Ukhta Magadan region 0.9% Noviy Urengoy Petropavlovsk- Kamchatskiy Yakutia 0.6% (Yamalo-Nenetskiy AD) MMA ● Norilsk Yakutsk Nenets AD 0.2% Magadan Nizhny Tagil Kazan Noyabrsk (Yamalo- Nenetskiy AD) Mirniy Other Russian regions 9.9% Foreigners 0.6% Stavropol Chelyabinsk Khanty- Mansiysk Total: 28.5% Surgut Nizhnevartovsk Orenburg Khabarovsk Uzhno- Sakhalinsk Krasnoyarsk ● Irkutsk Etalon Group's sales offices / representatives Established relationships/ partnerships with local sales agencies ⚫ Nakhodka Vladivostok The Group's flats are sold in 9 out of 10 richest Russian regions Disposable income (US$)(1) Moscow NenetsAD 1343 1247 Yamalo-Nents AD 1084 Chukotka 1064 Sakhalin 1025 Khanty-Mansijsk AD 995 873 866 841 789 603 Etalon Group's target regions • Etalon Group sales force is focused on the regions with the largest disposable income Key markets: SPMA and MMA • 30 cities covered with 10 sales offices in St. Petersburg and 10 sales offices nationwide • External professional marketing and sales service agents engaged nationwide (1) Average monthly disposable income, Rosstat data as of 3Q 2010; RUR values were converted into US$ at official CBR average exchange rate in 3Q 2010 (30.62 RUR/US$); (2)Source: management accounts St. Petersburg Kamchastsky Krai Magadan Yakulia Russia average ୬ Etalon Group 032#34Strategic vertical integration: control over costs, quality and timing Etalon Group operates in every part of property development process Land Acquisition & Permits Design Effective Capital Recycling Control over costs, quality & timely delivery of the projects Construction Materials Construction Contracting & Commissioning Tower Cranes Construction Independence from Funding suppliers, but only in crucial areas | I I Sales & Marketing Ongoing Maintenance & Service G Business stability and lower risk of counterparties' dependence Understanding of customer needs (sales network throughout the country) (1)Brick plant and concrete products plant. Own production only for "bottleneck" construction materials (2)38 Liebherr tower cranes (of which 37 were manufactured in 2006-2008). Data as of 31.12.2010 (3) Construction to third parties Etalon Group 033#35Board of Directors represents interests of all investor groups FOUNDERS Viacheslav Zarenkov Chairman of the Board of Directors, Founding shareholder and President of Etalon Group Experience and awards • 43 years of experience in construction industry Honored builder of Russia (1) Education . Institute of Civil Engineering and SPb University of the Internal Affairs • PhD in Economics, PhD in Technical Sciences, PHD in Architecture, Professor Dmitri Zarenkov First Vice-President of Etalon Group Experience and awards • • 16 years of experience in construction industry Honored builder of Russia(1); Certificate of Honour of the Ministry of Regional Development Education ⚫ Institute of Aeronautical Instrumentation, SPb University of Architecture & Civil Engineering and SPb University of Internal Affairs ⚫ PhD in Engineering NON-EXECUTIVE DIRECTORS Michael John Calvey Senior partner at Baring Vostok since 1999 Experience and awards • Member of the board of Europlan, Volga Gas, Gallery Media Group, etc. • . • 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 EXECUTIVE DIRECTORS Alexey Kalinin Senior partner at Baring Vostok 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 of directors at Samarenergo and two Russian glass companies Education • Moscow Power Engineering University • PhD in Engineering Alexander Shkuratov Head of strategy and business development of Etalon Group Experience and awards • 6 years of experience in construction industry • Worked at Baring Vostok, Carlyle Group, E&Y, Deloitte Education • Finance Academy under the Government of Russia (1) Title granted by President of Russia Martin Cocker INED at Etalon Group Experience and awards ⚫ 16 years of experience in audit, 3 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 Anton Evdokimov CFO of Etalon Group Experience and awards Peter Touzeau Client Director at International Private Equity Services (Guernsey) Limited Experience and awards • Director of the General Partners Boards of a number of Guernsey • private equity funds Director of the Board of the Investment Advisor to the funds investing in Russia, board member of a number of their portfolio companies • Worked at Sedgwick Management Services (Guernsey) Limited, Marsh Management Services (Guernsey) Ltd Education • Oatlands College • 26 years of experience in construction industry ⚫ Certificate of Honour of the Ministry of Regional Development of Russia Education ⚫ Leningrad Engineering Construction Institute, SPb State University and International Banking Institute, MBA Anton Poriadine INED at Etalon Group Experience and awards • 10 years of experience in strategy consulting at A.T. Kearney. Partner and Vice President at A.T. Kearney Previously project manager at Barents International Markets B.V., Corporate Development and Project Finance Director at Torno Internazionale S.p.A., deputy General Manager of St. Petersburg Foundation for Enterprise Development Education ⚫ St. Petersburg Technical University and Business School at the University Of Rochester Dmitri Boulkhoukov Head of investments of Etalon Group Experience and awards • 6 years of experience in construction industry • Worked at Renaissance Partners, Carlyle Group, Deloitte, E&Y Education • Moscow State University named after Lomonosov ✓ Etalon Group 034#36Strong corporate governance and cornerstone international investor Corporate governance structure General Shareholders Meeting Board of Directors Chairman (V. Zarenkov) • 4 Executive Directors • 5 Non-Executive Directors, including two Independent Directors Management Team Source: Company data (1)includes Baring Vostok Etalon Group Current shareholding structure 27.9% Board Committees Remuneration Committee 12.5% Nomination Committee Audit Committee • 1 INED (Chairman) • 1 NED • 2 Executive Directors 12.4% ■ Founders ■Management ■Institutional investors ■Free float As of 15 April 2011 47.2% 035#37Revenue recognition scheme Total development period range: 39-59 months 12-18 months 18-30 months 3-5 years Timing Stages of residential real estate Zoning & initial permit documentation development Investment contract, planning & construction permit Construction Pre-sale Cash & revenue recognition Instalment programs High permission risk Permission risk vs. Project value Low entry price Source: Company data ୬ Etalon Group Medium-low permission risk Medium entry price Etalon Group focus 6-8 months 3 months Up to 90% pre-sold and accounted in cash flows State commission, Act of acceptance signed 1 Ownership rights registration Revenue is recognized when the Act of acceptance is signed by the buyer • • Etalon Group provides its customers various instalment plans The terms of these installment programs are agreed on individual basis 036#38Industrial construction 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 Etalon Group Selected industrial projects completed by Etalon Group Toyota Ford Poling and gridding Design & construction (increase of production capacities) Admiralty Shipyards Nissan Infrastructure & site for the finished good Satellite Antennas Production Plant Turn-key project, which involved design and construction of an industrial building Construction of workshop & transportation utilities North-West Heat & Power Station Foundation construction for a cooling tower and main building GM Poling & road infrastructure construction Pulkovo customs Full construction cycle Almazov Medical Complex Renovation of the existing building and building up two additional floors 037#39Income statement Mn USD 2008 2009 2010 2011 Revenue 573.7 635.6 668.7 773.8 Cost of sales (368.4) (347.0) (364.6) (404.5) Gross profit 205.4 288.6 304.1 369.3 General and administrative expenses (62.0) (45.3) (67.4) (79.2) Selling expenses (18.1) (4.1) (19.4) (29.1) Other expenses, net (6.0) (6.2) (5.8) (0.9) Results from operating activities 119.03 233.0 211.5 260.1 Finance income 7.0 7.1 9.3 49.0 Finance costs (50.5) (33.0) (22.0) (2.0) Net finance costs (43.5) (25.9) (12.6) 47.0 Share of profit of equity accounted investees (net of income tax) 0.2 0.1 0.0 0.0 Profit before income tax 75.9 207.1 198.9 307.1 Income tax expense (28.7) (45.1) (44.6) (53.9) 47.2 162.0 154.3 253.1 Profit for the period Profit attributable to: Owners of the Company Non controlling interest Profit for the period Source: audited consolidated IFRS accounts for 2008, 2009, 2010, 2011 ୬ Etalon Group 31.2 155.4 152.3 249.5 16.0 6.6 1.9 3.7 47.2 162.0 154.3 253.1 038#40Balance sheet Mn USD Assets 01/01/08 2008 2009 2010 2011 Mn USD 01/01/08 2008 2009 2010 2011 Equity and Liabilities Non-current assets Equity PP&E 36.2 38.2 55.0 54.5 62.4 Share capital 0.04 0.03 0.03 0.03 0.03 Other long-term investments 2.5 2.7 1.1 1.3 2.7 Share premium 66.4 64.5 64.0 479.4 0 Trade and other receivables 20.3 20.2 26.7 26.7 17.1 Reserve for own shares (14) 0 0 0 0 Deferred tax assets 42.9 40.4 36.9 8.6 21.1 Retained earnings (16.9) 13.5 176.1 333.2 549.8 Total equity attributable to Other non-current assets 4.4 1.2 0.1 1.1 2.9 equity holders of the (16.9) 80.0 240.6 397.3 1,015.0 Company Total non-current assets 106.4 102.7 119.7 95.1 106.2 Non-controlling interest 11.0 20.2 25.6 15.1 11.6 Current assets Total equity (5.9) 100.1 266.2 412.3 1,026.6 Inventories 636.9 996.2 883.5 841.6 995.2 Non-current liabilities Trade and other receivables 94.5 112.2 128.2 130.1 232.1 Long-term debt 190.5 63.5 85.1 219.9 262.6 Long-term trade and other Short-term investments 0.8 1.1 0.9 11.2 2.6 1.8 12.6 8.6 1.5 41.2 payables Cash and cash equivalents 37.4 80.9 113.0 119.3 Provision 2.9 2.6 2.7 2.7 2.4 449.8 Other current assets 0.5 0.2 0.8 1.9 1.1 Deferred tax liabilities Total non-current liabilities 4.1 9.5 27.8 1.3 3.0 200.2 77.5 128.2 1232.4 269.5 Total current assets Total assets 770.1 1,190.7 1,126.4 1,104.0 1,719.4 876.5 1,293.4 1,246.1 1,199.1 1,825.6 Source: audited consolidated IFRS accounts for 2008, 2009, 2010, 2011 Current liabilities Loans and borrowings Trade and other payables Provisions 76.0 165.7 108.2 46.7 593.4 898.7 679.8 468.6 12.8 51.4 63.6 39.0 60.6 420.5 48.4 Total current liabilities Etalon Group Total equity and liabilities 682.2 1,115.8 851.6 554.4 876.5 1.293.4 1.246.1 1.199.1 1.825.6 5295 039#41Cashflow statement Mn USD Operating Activities Profit for the year Adjustments for 2008 2009 2010 2011 Mn USD 2008 2009 2010 2011 Investing Activities 47.2 162.0 154.3 253.1 Proceeds from disposal of non-current assets 1.9 3.4 1.0 4.0 Interest received 3.5 6.3 3.1 4.8 Acquisition of PP&E (17.9) (7.0) (10.8) (24.7) Depreciation and amoritasation 7.7 6.5 9.4 9.0 (Gain/loss on disposal of PP&E Loss on disposal of subsidaries 0.2 (2.0) (0.0) (3.1) Loans given (3.4) (8.4) (3.5) (8.6) 0 0 0.2 0.0 Loans repaid 0.7 0.2 2.0 8.0 Share of profit on equity accounted investees Acquisition of subsidiaries, net of cash acquired (0.2) (0.1) 0.0 0.0 0.0 0.5 0.3 0.0 Gain/(loss) on disposal of other Disposal of subsidiaries, net of cash disposed of 0.0 0.0 0.0 (0.8) 0.0 0.0 (1.2) (0.6) investments Finance cost, net 44.9 24.3 16.1 (48.5) Acquisition of other investments 0.0 0.0 (9.1) (34.9) Impairment losses on loans given 2.0 2.4 0.0 0.0 Net cash used in investing activities (15.2) (4.9) (18.3) (52.1) Income tax expense 28.7 45.1 44.6 53.9 Financing activities: Cash from operating activities 130.6 238.2 224.6 263.7 Proceeds from IPO 0.0 0.0 0.0 458.9 before changes in working capital Proceeds from issue of share capital 78.4 0.0 0.0 0.0 Change in inventories (530.0) 81.6 50.0 (180.6) Acquisition of non-controlling interest (0.4) 0.0 (3.2) (0.1) Change in accounts receivable (42.7) Change in accounts payable 476.3 (26.0) (6.6) (196.2) (219.2) (98.4) Proceeds from disposal of non-controlling interest 0.0 0.0 0.0 0.8 (27.8) Proceeds from borrowings 283.4 272.2 355.3 216.2 Change in provisions 48.2 Change in other currents assets Income tax paid Interest paid Net cash provided by operating 68.6 13.2 (24.2) 0.0 (0.5) (1.1) (27.6) (15.9) (35.6) (28.4) (26.0) (26.8) 26.5 (39.0) (131.8) 12.5 Repayments from borrowings 0.8 (64.5) (37.4) Acquisition of own shares Dividends paid activities Net cash (used in) from financing activities Net increase in cash and cash equivalents 57.3 (314.6) (303.4) (283.7) (164.0) 0.0 0.0 0.0 (15.6) (0.8) (1.0) (1.3) 0.0 46.0 (32.1) 67.1 496.1 31.6 9.9 312.2 Source: audited consolidated IFRS accounts for 2008, 2009, 2010, 2011 Cash & cash equivalents at the end of the 95.6 107.5 119.7 492.8 period ✓ Etalon Group 040#42Etalon 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] 041