#1Investor presentation 30 March 2015 P 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. 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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. 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. Neither the Company, nor any of its agents, employees or advisors intend or have any duty or obligation to supplement, amend, update or revise any of the forward-looking 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 information contained in this document is provided as at the date of this Presentation and is subject to change without notice. Neither the Company nor any of its agents, directors, officers, employees, shareholders, affiliates, advisors or representatives intend or have any duty or obligation to supplement, amend, update or revise any information contained in this Presentation. This Presentation contains certain unaudited half- and full-year financial information which has been prepared based on the Company's reviewed management accounts. This Presentation contains also certain full- and half-year financial information based on the Company's audited consolidated IFRS accounts. It also includes certain non-IFRS financial information, such as Earnings before interest, taxes, depreciation and amortization ("EBITDA"), EBITDA margin, Working capital and free cash flow ("FCF") which has not been audited or reviewed by the Company's auditors. 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. 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Etalon Group 1#3Today's presenting team Anton Evdokimov Chief Executive Officer Member of the Board of Directors With Etalon Group since 1998 Kirill Bagachenko Head of Corporate Investments and IR Member of the Board of Directors With Etalon Group since 2013 > Etalon Group 2#43 L BEE EE Financial results Landbank valuation Appendix Etalon Group#5Summary 1 2 3 4 5 Strong operating results in 2014, with deliveries up 24% and new contract sales up 28% (in sqm) Robust financial performance, with revenue up 29% to RUB 51.5 billion and net income up 26% to RUB 8.4 billion Project portfolio grew in value by 17% to RUB 104.3 billion, or RUB 357 per share (source: JLL portfolio valuation as of 31 December 2014) Balance sheet remains exceptionally strong, with net debt of only RUB 636 million (0.06x net debt / EBITDA) Etalon Group is well positioned to continue creating shareholder value in a more complicated macro environment > Etalon Group 4#6Etalon Group delivered record volumes of high-quality housing on schedule Deliveries, ths sqm Transfers h-o-h, sqm 468 440 +24% 580 504 28 76 2013 2014 1H ■2H 2014 project deliveries breakdown Project NSA delivered in 2014, ths sqm Emerald Hills 133 Rechnoy 111 Molodejny 107 Tsar's Capital 107 Swallow's Nest 83 Galant 39 Total 580 Source: Company data > Etalon Group 349,793 +15% 403,463 2013 2014 Etalon Group successfully delivered on its construction plan in 2014, completing 580 ths sqm of NSA for the year, an increase of 24% compared to 2013 and an all-time record for the Company. During 2014 Etalon delivered a total of 16 buildings containing 8,055 flats at ongoing projects including Tsar's Capital, Swallow's Nest, Molodejny and Emerald Hills, as well as at Rechnoy and Galant, where the Company completed construction work. LO 5#7FY 2014 Operating results outperform Company guidance Number of contracts 6,932 +30% New contract sales, sqm 9,045 356,075 2013 2014 Cash collections, mln RUB +36% 35,335 +28% 457,056 2013 2014 New contract sales y-o-y, mln RUB +27% New contract sales, mln RUB 30,227 +32% 39,961 2013 2014 +32% 13,309 +30% 9,406 26,073 9,480 7,416 6,031 8,152 5,563 8,095 4,336 5,194 6,746 3,781 9,078 4,158 5,566 5,923 2013 2014 2011 2012 2013 2014 ■1Q 2Q 3Q 4Q Source: Company data > Etalon Group 6#8Better product mix drives new contract sales in 2014 FY 2013 New contract sales by project, sqm FY 2014 New contract sales by project, sqm Etalon City Other projects 1% Swallow's Nest Letniy 10% 9% 10% Jubilee Estate 16% 22% Emerald Hills 9% 6% 4% 13% Rechnoy Tsar's Capital Galant Molodejny Significant portfolio diversification with growing share of prime location projects Moscow Etalon City Gates Other projects Letniy 3% 1% 3% Swallow's Nest Samotsvety 3% 23% 5% Jubilee Estate 5% Rechnoy 7% 7% Galant 20% Emerald Hills 9% 14% Molodejny Average price, RUB/sqm Tsar's Capital • Swallow's Nest and Emerald Hills enjoy continued strong demand from customers 95,000 87,887 89,40290,511 85,671 85,271 84,286 83,234 • Samotsvety, launched in 3Q 2014, already accounted for 5% of new sales in 2014. Moscow Gates, launched at the very end of November 2014, contributed c. 1% to total 2014 sales 80,606 78,484 80,000 75,120 74,073 71,611 • The blended average price per sqm increased 3% year-on-year to RUB 87.4 thousand. Average prices for apartments increased 8% year-on-year to RUB 95.1 thousand per sqm 65,000 50,000 Source: Company data > Etalon Group 1Q12 2012 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2014 3Q14 4Q14 7#9Strong operating results reflected in robust financial performance Transfers to customers, sqm Residential real estate development 349,793 +15% 403,463 2013 2014 revenue, mln RUB +27% 29,548 37,560 2013 2014 Construction services revenue from third parties/external, mln RUB Total revenue, mln RUB 7,256 +37% 9,909 39,921 +29% 51,481 2013 2014 2013 2014 Source: IFRS financial statements, Company information > Etalon Group 8#10Healthy profitability levels maintained Adjusted gross profit*, mln RUB +28% 16,820 371 1,369 13,147 440 743 2013 11,964 2014 Residential real estate development 15,080 Residential real estate development adjusted gross profit*, mln RUB 11,964 +26% 15,080 40% 40% 2013 2014 Residential real estate development adjusted gross profit*, mln RUB Construction services Adjusted gross profit margin*, % Other segments plus elimination of inter-segment profit Net income, mln RUB EBITDA, mln RUB 9,430 +13% 10,611 6,664 +26% 8,369 2013 2014 2013 2014 Source: IFRS financial statements *Note 5 to IFRS financial statements > Etalon Group 9#11Excellent financial performance in 2H 2014 Revenue Residential real estate development revenue, mln RUB +66% Construction services revenue from third parties/external, mln RUB 17,299 28,687 4,309 +38% 5,930 2H 2013 2H 2014 2H 2013 2H 2014 Profitability Adjusted gross profit*, mln RUB EBITDA, mln RUB 7,222 +76% 12,700 5,232 +71% 8,928 Total revenue, mln RUB 23,286 +59% 36,942 2H 2013 2H 2014 Net income, mln RUB 3,566 +109% 7,442 2H 2013 2H 2014 2H 2013 2H 2014 2H 2013 2H 2014 Source: IFRS financial statements > Etalon Group 10#12Strong balance sheet secured by robust cash collections Liquidity position, RUB mln (1) 30.06.2013 30.06.2014 Gross debt composition (as of 31/12/2014) (1) By type of facility By currency 31.12.2013 31.12.2014 349 net cash 182 1,076 net debt net debt Debt maturity profile (as of 31/12/2014; RUB mln) (2) 4,201 3,944 5,721 636 net debt 69% Highlights 605 16,291 1,820 2015 2016 2017 2018 2019-2021 Total (1) IFRS financial statements (2) Includes accrued interest payable in 2015, based on management accounts Etalon Group 8% ■Local 31% bonds ■Bank loans 92% ■RUB ■ EUR • Company estimates that only c. 15% of total construction costs linked to USD Foreign currency denominated cash to debt ratio is 3.5 (as of 31 December 2014) 0.06x Net debt/EBITDA (as of 31 December 2014) USD/RUB fx rate as of 31 December 2014 56.26 EUR/RUB fx rate as of 31 December 2014 68.34 11#13Balanced growth strategy IPO proceeds 71,934 55,184 43,172 0.5x 0.44x 0.44x 0.44x 0.5x 0.43x 0.4x 0.4x 0.3x 0.3x 0.2x 0.2x 0.1x 0.1x 0.0x 2012 2013 2014 110 104,286 89,253 100 90 80 0.34x Organic portfolio value 70 growth as a result of IPO 60 proceeds investment 50 40 30 20 10 0 2010 2011 (1,462) (76) (1,482) (4,482) (4,897) 2010 2011 2012 2013 2014 FCF, mln RUB Open Market Value, (1) mln RUB 15 10 5525225250 1.53x 1.53x 1.49x 45 40 1.25x 35 30 1.6x 45 1.4x 1.29x 1.2x 1.0x 0.8x 0.6x 0.4x 0.2x 0.0x 55233225050 40 1.04x 15 10 2010 2011 2012 2013 2014 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. 39-40 (1) JLL land bank valuation report as of 31.12.2014 Etalon Group 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 1.14x 1.2x 1.0x 0.8x 0.6x 0.4x 0.2x 0.0x 2013 2014 2010 2011 2012 Working capital, bln RUB (lhs) New Contract Sales, bln RUB (lhs) Working capital to New Contract Sales ratio (rhs) 12#14Etalon Group's portfolio grew in value again in 2014 despite the more complex macro environment Open market value, RUB mln Open market value per share, RUB Breakdown by region Breakdown by stage of development 89,253 +17% 104,286 305.6 +17% 357.1 46% 44% 56% 2013 2014 2013 2014 5% 49% ■ Projects under development ■ SPMA ■ MMA ■ Projects at design stage ■ Projects completed Sustainable growth of open market value based on well diversified portfolio • Market value of the Group's portfolio as of 31 December 2014 reached RUB 104,286 million, up 17% year-on-year • Landbank volume remained generally stable at 3.11 million sqm of unsold NSA • The Company acquired one new project in St. Petersburg during 2014 The share of MMA projects reached 44%, up 2 p.p. year-on-year Source: JLL estimate as of 31.12.2014 > Etalon Group 13#15Etalon Group targets optimal land bank management • • Acquired 1 project acquired in 2014: • Three-hectare land plot situated on Polyustrovskiy prospect in the Kalininskiy district of St. Petersburg Total NSA - 91 ths sqm Land planning documentation for the land plot already obtained, allowing the rights holder to begin construction in the near future Property is located within walking distance from the Lesnaya metro station and four kilometres from central St. Petersburg Launched 2 projects launched in 2014 enjoy strong demand, driving new sales: Samotsvety Completed 2 projects completed in 2014 still generate sales without extra spending: Moscow Gates • Total NSA-206 ths sqm • Total NSA 234 ths sqm . Launched in August 2014 Launched in November 2014 • • Project share in 4Q 2014 sales - 4% Project share in 4Q 2014 sales - 12% Galant • Total NSA 50 ths sqm Apartment pre-sales rate - 67% (as of June 2014) Rechnoy Total NSA 111 ths sqm Apartment pre-sales rate - 82% (as of December 2014) Total inventory of completed and available for sale property stands at 432 ths sqm, including 220 ths sqm of apartments, as of 31.12.2014 Source: Company data and JLL land bank valuation report as of 31.12.2014 Etalon Group 14#16Operations in SPMA and MMA Projects in St. Petersburg Metropolitan Area Design stage Under construction Completed > Etalon Group 8 4 7 2 O 6 Projects in Moscow Metropolitan Area 1 Design stage Under construction 3 2 5 15#17Etalon Group portfolio: high quality projects diversified across the two most lucrative macro regions in Russia Project Total NSA Status ('000 sqm) Unsold NSA (Etalon's share) parking (lots), ('000 sqm) (1) # Unsold OMV (RUBmln) Income from sales (RUBmln) (2) Construction budget (RUBmln) Outstanding (3) budget (RUBmln) (3) Current Projects St. Petersburg Metropolitan Area (SPMA) 1. Galactica Design stage 779.4 631.5 4,238 8,182 78,557 38,978 37,520 2. Tsar's Capital Construction 392.4 216.3 2,089 13,197 33,225 15,374 6,868 3. Swallow's Nest Construction 333.6 149.0 1,582 8,720 22,932 13,365 1,880 4. Moscow Gates 5. Samotsvety 6. Molodejny Construction 234.1 202.0 884 7,104 25,662 10,136 8,122 Construction 205.8 179.6 1,654 8,613 22,614 8,466 5,757 Construction 111.8 25.8 491 935 8,545 4,352 1,140 7. Polyustrovskiy prospect Design stage 91.3 91.3 530 1,098 6,965 3,377 3,377 8. Technopark Design stage 51.0 51.0 440 572 4,451 3,571 3,089 9. Beloostrovskaya Design stage 42.9 41.0 277 383 3,588 2,290 2,281 Total SPMA 2,242.3 1,587.6 12,185 48,804 206,540 99,909 70,033 Moscow Metropolitan Area (MMA) 1. Emerald Hills Construction 864.8 479.3 3,174 18,484 66,218 37,548 17,094 2. Etalon-City Construction 372.2 272.3 2,276 8,871 34,955 17,575 15,531 3. Dmitrovskoe shosse Design stage 322.3 266.1 2,122 5,276 33,604 16,696 16,579 4. Alekseevskiy District Design stage 179.5 169.6 2,160 6,835 23,957 8,973 8,903 5. Budennogo street Design stage 119.0 110.7 936 3,825 13,950 5,836 5,763 6. Losinoostrovskiy District Design stage 91.5 83.9 851 3,032 11,635 4,372 4,351 Total MMA 1,949.3 1,381.8 11,519 46,323 184,319 90,998 68,222 Total Current Projects 4,191.6 2,969.4 23,704 95,127 390,859 190,907 138,255 Completed Projects Residential property in completed projects Completed stand-alone commercial properties Total Completed Projects All Projects Total Etalon Group (1) Source: construction period based on company estimates, all numbers based on JLL report as of 31.12.2014 Including parking with average area c. 30 sqm (2) Income from sales includes potential and received incomes as of 31 December 2014 Etalon Group 124.5 20.4 144.9 3,219 8,198 59 3,278 961 9,159 3,114.3 26,982 104,286 (3) Excluding land acquisition costs 16#18FY 2014 construction volumes: yet another year of successful growth Construction programme, ths sqm of NSA 12,360 200 209 2010 13,589 13,035 12,580 12,031 364 363 319 328 467 468 2011 2012 2013 Actual Construction programme Total deliveries in target regions* 580 580 2014 Source: Company estimates *Calculations of total deliveries in target markets (MMA and St. Petersburg) for 2010-2013 are based on GKS data, 2014 total deliveries based on GKS data and preliminary announcements of Moscow region Government representatives > Etalon Group 17#19Summary of 2015 planned deliveries Project deliveries breakdown for 2015 NSA to be delivered in Project Region 2015, ths sqm 1 Tsar's Capital SPMA 158 2 Samotsvety SPMA 128 3 Moscow Gates SPMA 66 4 Emerald Hills MMA 65 5 Etalon City MMA 43 6 Swallow's Nest SPMA 40 Total 500 Source: Company estimates > Etalon Group 18#20Tsar's Capital February 2015 December 2013 Total NSA 392 ths sqm Planned 2015 deliveries 158 ths sqm *JLL estimate as of 31.12.2014 > Etalon Group Open Market Value* RUB 13,197 mln , Income from sales* RUB 33,225 mln 19#21Samotsvety February 2015 Total NSA 206 ths sqm *JLL estimate as of 31.12.2014 > Etalon Group December 2013 Planned 2015 deliveries 128 ths sqm Open Market Value* RUB 8,613 mln Income from sales* RUB 22,614 mln 20 20#22Moscow Gates February 2015 Total NSA 234 ths sqm *JLL estimate as of 31.12.2014 > Etalon Group December 2013 Planned 2015 deliveries 66 ths sqm Open Market Value* RUB 7,104 mln Income from sales* RUB 25,662 mln 21#23Emerald Hills February 2015 Total NSA 865 ths sqm *JLL estimate as of 31.12.2014 > Etalon Group December 2013 Planned 2015 deliveries 65 ths sqm Open Market Value* RUB 18,484 mln Income from sales* RUB 66,218 mln 22#24Etalon City February 2015 December 2013 Total NSA 372 ths sqm *JLL estimate as of 31.12.2014 > Etalon Group Planned 2015 deliveries 43 ths sqm Open Market Value* RUB 8,871 mln Income from sales* RUB 34,955 mln 23#25Swallow's Nest February 2015 Total NSA 334 ths sqm *JLL estimate as of 31.12.2014 > Etalon Group December 2013 Planned 2015 deliveries 40 ths sqm Open Market Value* RUB 8,720 mln Income from sales* RUB 22,932 mln 24#26Appendix EEEEEEEEEEEELEFELEEEE EEEEEEEEEEEEEEEEEEEE#27At 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) • 29% CAGR for deliveries over 2010- 2014(1) Strong delivery track record • Over 27 years of construction & development experience ⚫4.5 mln sqm commissioned True vertical integration •Strategic vertical integration in key value-added segments of property development enables the Company to control costs, quality and timing ⚫5,000 employees •Country-wide sales network covering 36 cities Diversified projects portfolio • Land bank of 3.11 mln sqm (2) . • Land bank sufficient until 2018 • Projects well diversified by locations within both SPMA and MMA Liquidity and credit ratings • Secure liquidity position supported by pre-sales cash collections model • Low leverage: 0.06x net debt / EBITDA, with a net debt of just RUB 636 mln (3) •Credit rating by S&P: B+/B(4) 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 operating results; (2) JLL land bank valuation report as of 31.12.2014; (3) IFRS financial statements as of 31 December 2014; (4) 'B+' long-term & 'B' short-term corporate credit ratings of SSMO LenSpetsSMU (last reconfirmed on 29.07.2013). LSE ticker Share price Market capitalization Portfolio valuation (by Jones Lang La Salle) ETLN:LI USD 2.20 (26.03.2015) USD 642 mln (26.03.2015) RUB 104,286 mln (31.12.2014) Portfolio composition (2) ■ SPMA 44% 56% ■ MMA 5% ■Projects under development 49% Projects at design stage 46% Projects completed ✓ Etalon Etalon Group 46 26#28Strategic vertical integration: control over costs, quality and timing Etalon Group operates in every part of property development process > 40 business units 5,000 people Land Acquisition & Permits Design Effective Capital Recycling Construction Materials* Construction Contracting & Commissioning Funding Independence from suppliers, but only in crucial areas I I 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 62 tower cranes (Liebherr and Wolff). Data as of 31.12.2014 Etalon Group 27#29Nationwide sales & marketing network supports sustainable contracting Powerful sales network across the country Regional population actively buys apartments in Moscow and St. Petersburg Murmansk Apatity Severodvinsk SPMA Arkhangelsk Petrozavodsk Cherepovets Yaroslavl MMA Izhevsk Ekaterinburg Ukhta Nadim Siktivkar Chelyabinsk ⚫ Norilsk Salekhard • Noviy Urengoy ● Noyabrsk Surgut Novosibirsk Nizhnevartovsk Tomsk Etalon Group's regional sales geography(1) Region Leningrad Khanty-Mansiysk AD Yamalo-Nenets AD Murmansk Khabarovski krai Yakutia Krasnoyarski krai Petropavlovsk- Kamchatskiy Kamchatski krai Yakutsk Magadan Other Russian regions Mirniy Foreigners Total: Share of total contracts 6.0% 2.0% 1.9% 1.8% 1.5% 1.4% 1.4% 1.3% 16.4% 0.8% 34.4% Neryungri The Group's flats are sold in 14 out of Russia's 15 richest regions Etalon Group's sales offices / representatives Established relationships/ partnerships with local sales agencies Khabarovsk Uzhno- Sakhalinsk Average income per capita (RUB)(2) Usolye-Sibirskoye Blagoveshchensk Irkutsk Nenets AD Yamalo-Nenets AD Vladivostok ⚫ Nakhodka Moscow Chukotka Magadan 67,620 60,694 55,170 54,706 45,936 Sakhalin 44,527 . Etalon Group sales force is focused on the regions with the largest income per capita • Key markets: SPMA and MMA Khanty-Mansiysk AD 41,929 Tyumen 38,695 • 36 cities covered with 13 sales offices in St. Petersburg and 17 more sales offices nationwide External professional marketing and sales service agents engaged nationwide Kamchatski krai Moscow region Saint Petersburg 37,369 34,853 34,661 Yakutia Murmansk Khabarovski krai 34,069 33,991 32,013 Sverdlovsk Russia average 31,999 27,749 (1)Source: company data for 4Q 2014 (2) Average monthly cash income per capita, Rosstat's preliminary estimates for 12M 2014 Etalon Group Etalon Group's target regions 28#30INDEPENDENT NON-EXECUTIVE DIRECTORS EXECUTIVE DIRECTORS (1) Title granted by President of Russia ✓ Etalon Etalon Group FOUNDING SHAREHOLDERS Experience and awards . • 45 years of experience in construction industry Honoured builder of Russia (1) Education ⚫ Institute of Civil Engineering, SPb University of Internal Affairs ⚫ PhD in Economics, PhD in Technical Sciences, PhD in Architecture, Professor Board of Directors represents interests of all investor groups Viacheslav Zarenkov Chairman of the Board of Directors, Founding shareholder and President Dmitry Zarenkov Vice-President Experience and awards • 18 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 Anton Evdokimov Chief Executive Officer, First Vice-President Boris Svetlichny Chief Financial Officer Kirill Bagachenko Head of Corporate Investments and IR Experience and awards • 28 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) Experience and awards • Over 26 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) Experience and awards • 10 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 Martin Cocker Independent Non- Executive Director Experience and awards 19 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 Anton Poryadin Independent Non- Executive Director Experience and awards •13 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 Andrew Howat Independent Non- Executive Director Experience and awards • 30 years of experience in international finance, banking and investment businesses • Worked as a senior Director at ING Bank in the Corporate Banking and Financial Markets divisions, and as Managing Director of Butterfield Fulcrum • Chartered member of the Chartered Institute for Securities & Investment Education • Farnborough College of Technology 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 • Worked at ÉBRD, 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 Alexei 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 at Samarenergo and two Russian glass companies Education •Moscow Power Engineering University ⚫ PhD in Engineering 29#31Strong corporate governance and shareholding structure Corporate governance structure General Shareholders Meeting Board of Directors • Chairman (V. Zarenkov) Shareholding structure 1.0% 30.8% 44.1% Board Committees • 4 Executive Directors • 5 Non-Executive Directors, including 3 Independent Directors Strategy Committee Remuneration & Nomination Committee 16.4% 7.7% Zarenkov family Management Baring Vostok Free float Etalon Development Ltd Management Team Audit Committee As of 31 December 2014 Source: Company data > Etalon Group 30 10#32Typical project cost structure Materials cost structure * (RUB 12,000 18,000 per sqm of NSA) Crushed granite Sand Bricks 4% 4% 6% Cement 14% Metal products 20% Typical project lifecycle* Construction cost structure * (RUB 29,000 - 39,000 per sqm of NSA) Overhead expenses Machinery Materials 8% 8% 41% 52% Other 23% Total cost structure * (RUB 59,000 - 72,000 per sqm of NSA) Project management 20% Wages Construction 45% Taxes Task Share,% Start, month Duration, month Predevelopment 3 0 8 Zero cycle works 7 2 10 Construction works 43 133 5 20 Facade works 11 16 10 Fit out works 5 18 10 MEP systems 14 7 21 Engineering facilities 15 5 23 Urban landscaping 2 24 6 0 5 Design Interest expense 4% 4% 6% Sales costs 6% Other 7% Construction timeline, month 10 15 *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 Etalon Group 8% Infrastructure 20% Land acquisition 20 20 25 30 31#33Residential development scheme Timing 3-5 years Permission risk High permission risk vs. Project value Low entry price Total development period range: 39-59 months 12-18 months Medium-low permission risk Medium entry price Stages of residential Zoning & initial permit real estate documentation development Investment contract, planning & construction permit Revenue recognition Source: Company data Etalon Group I 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 32#34Construction 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 24 milestone projects • Heat & power station, two hotels, four car assembly plants, shipyards, machinery plant, fitness and sports centre etc. Strategy • 3 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 key projects Toyota Poling and gridding Nissan TOYOTA Infrastructure & site for the finished goods ExpoForum Ford GM Design & construction (increase of production capacities) Admiralty Shipyards Poling & road infrastructure construction Pulkovo customs Construction of workshop & transportation utilities North-West Heat & Power Station Full construction cycle Almazov Medical Complex Full construction cycle Foundation construction for a cooling tower and main building Renovation of the existing building and building up two additional floors 33#35Financial analysis BAY Etalon Group ELLE#36Income statement mln RUB Revenue 2011 2012 2013 2014 22,741 26,894 39,921 51,481 Cost of sales (11,888) (17,494) (27,553) (35,685) Gross profit 10,853 9,400 12,368 15,796 General and administrative expenses (2,328) (2,324) (3,157) (4,178) Selling expenses (854) (958) (1,023) (1,474) Other expenses, net (27) (209) (40) (913) Results from operating activities 7,644 5,909 8,148 9,231 Finance income 1,441 749 691 1,717 Finance costs (60) (132) (342) (553) Net finance income 1,381 617 349 1,164 Profit before income tax 9,025 6,526 8,497 10,395 Income tax expense (1,585) (1,526) (1,833) (2,026) Profit for the period 7,440 5,000 6,664 8,369 Profit attributable to: Owners of the Company 7,332 4,979 6,629 8,345 Non-controlling interest Profit for the period 108 21 35 24 7,440 5,000 6,664 8,369 Source: IFRS financial statements for 2011, 2012, 2013, 2014 Etalon Group 35#37Balance sheet mln RUB 2011 2012 2013 2014 mln RUB 2011 2012 2013 2014 Assets Equity and Liabilities Non-current assets Equity PP&E 2,009 2,380 1,962 2,503 Share capital 14,980 14,967 14,967 14,983 Investment property 1,142 808 Retained earnings 17,704 22,688 29,332 36,537 Other long-term investments 88 60 275 1,036 Total equity attributable to equity holders of the Company 32,684 37,655 44,299 51,520 Trade and other receivables 551 433 1,332 2,521 Non-controlling interest 408 Total equity Deferred tax assets 679 434 560 372 33,056 38,063 44,686 51,871 387 351 885 Other non-current assets 92 11 10 10 Total non-current assets 3,419 3,318 5,281 Current assets Non-current liabilities 7,763 Loans and borrowings Trade and other payables Provision 8,456 12,811 10,176 12,411 48 980 785 2,854 77 65 89 114 Inventories 32,047 Trade and other receivables Short-term investments Cash and cash equivalents Other current assets Total current assets Total assets 41,522 50,057 7,473 11,058 15,078 1,327 6,870 5,008 14,484 10,716 8,139 34 32 7 57,525 Deferred tax liabilities Total non-current liabilities 15,074 98 226 826 1,456 8,679 14,082 11,876 16,835 1,221 Current liabilities 14,631 Loans and borrowings 66 55,365 70,198 78,289 58,784 73,516 83,570 96,280 Total current liabilities 88,517 Trade and other payables Provisions 1,950 3,825 13,539 16,966 22,300 21,460 1,560 580 1,665 2,234 3,043 3,880 17,049 21,371 27,008 27,574 Source: IFRS financial statements for 2011, 2012, 2013, 2014 > Etalon Group Total equity and liabilities 58,784 73,516 83,570 96,280 36#38Cashflow statement mln RUB 2011 2012 2013 2014 mln RUB 2011 2012 2013 2014 Operating Activities Investing Activities Profit for the period 7,440 5,000 6,664 8,369 Proceeds from disposal of non-current assets 117 71 15 66 Adjustments for Interest received 140 552 611 823 Depreciation 265 417 343 417 Acquisition of PP&E (726) (844) (431) (653) Gain on disposal of PP&E (92) (49) (15) (52) Loans given (253) (371) (55) (178) Loss on disposal of subsidiaries 1 28 Loans repaid 234 363 85 174 Gain on disposal of equity (24) accounted investees Acquisition of subsidiaries, net of cash acquired 10 Impairment loss on investment 280 property Disposal of subsidiaries, net of cash disposed of (8) Impairment loss on inventories 466 Finance income, net (1,425) (544) Income tax expense 1,585 1,526 (337) 1,833 (1,164) 2,026 (Acquisition)/disposal of other investments Net cash used in investing activities Financing activities (17) (1,027) (5,506) 1,606 3,038 (1,532) (5,743) 1,821 3,277 (20) 7 Cash from operating activities Proceeds from IPO 13,487 7,750 6,378 8,488 10,342 before changes in working capital Acquisition of non-controlling interest (3) (3) (10) (83) Change in inventories (5,308) (7,633) (7,837) (6,890) Change in accounts receivable (2,893) (3,024) (5,080) (1,427) Proceeds from disposal of non-controlling interest 24 Change in accounts payable (818) 4,074 4,880 1,184 Proceeds from borrowings Change in provisions 367 (992) 1,109 594 Repayments of borrowings Change in other currents assets 24 3 25 (59) Acquisition of own shares 6,353 12,140 5,937 (4,821) (5,552) (9,668) (459) 10,763 (8,498) (13) 16 Income tax paid (1,897) Interest paid Net cash from/(used in) operating activities (3,873) (1,833) (907) (1,098) (1,097) (1,724) (4,124) (1,046) (1,645) (1,588) Dividends paid (1,124) Net cash from/(used in) financing activities 14,581 511 Net increase/(decrease) in cash and cash equivalents Effect of FX rate fluctuations Source: IFRS financial statements for 2011, 2012, 2013, 2014 ✓ Etalon Etalon Group Cash & cash equivalents at the end of the period 14,484 6,572 (3,741) 9,176 (3,295) (2,966) 1,672 (473) 10,716 8,139 14,631 1,074 4,862 389 1,630 37#39EBITDA calculation mln RUB 2011 2012 2013 2014 Comprehensive income 7,440 5,000 6,664 8,369 Income tax expense 1,585 1,526 1,833 2,026 Interest expense on loans and finance leases 10 7 233 295 Net foreign exchange loss 125 109 Interest income on bank deposits (140) (543) (583) (729) Interest income on loans and receivables (6) (9) (28) (94) Interest income on promissory notes Gain on repurchase of CLNS Net foreign exchange gain Bank fees and commissions Interest in COS Depreciation EBITDA (1,168) (814) 46 67 80 117 169 341 779 1,024 265 417 343 417 8,201 6,931 9,430 10,611 2011 2012 2013 2014 Depreciation to COGS (Note 13 PP&E) 239 385 292 271 Depreciation to selling expenses (Note 13 PP&E) 1 1 1 4 Depreciation to G&A expenses (Note 13 PP&E) 25 31 39 94 Depreciation to Investment property (Note 14 Investment property) 11 48 Etalon Group 38#40Working capital calculation Working capital calculation mln RUB Total inventory 2011 2012 2013 2014 32,047 41,522 50,057 57,525 Current part + Trade and other receivables 7,473 11,058 15,078 15,074 - Trade and other payables 13,539 16,966 22,300 21,460 1,560 580 1,665 2,234 - Provisions Non-current part + Trade and other receivables - Trade and other payables - Provisions Adjustments 551 433 1,332 2,521 48 980 785 2,854 77 65 65 89 114 - Cumulative borrowing costs capitalized during the period (Note 11 Finance income and finance costs) 1,482 2,725 4,092 5,416 + Cumulative borrowing costs that have been included into the cost of sales (Note 11 Finance income and finance costs) 169 510 1,289 2,313 -Income tax receivable (Note 18 Trade and other receivables) +Income tax payable (Note 25 Trade and other payables) Working capital 72 310 103 159 447 7 248 380 23,909 31,904 38,970 45,576 Etalon Group 39#41FCF calculation mln RUB Comprehensive income Adjustment for: Depreciation Gain on disposal of PP&E Impairment loss on investment property Impairment loss on inventories 2011 2012 2013 2014 7,440 5,000 6,664 8,369 265 417 343 417 (92) (49) (15) (52) 280 466 Loss on disposal of subsidiaries 1 28 Gain on disposal of equity accounted investees (24) Finance income, net (1,425) (544) (337) (1,164) Income tax expense 1,585 1,526 1,833 2,026 Income tax paid (1,897) (1,833) (907) (1,645) Interest paid (1,098) (1,097) (1,724) (1,588) (Increase)/Decrease in working capital (8,628) (7,572) (6,903) (6,598) (Increase)/Decrease in invested capital (609) (773) (416) (587) FCF (4,482) (4,897) (1,462) (76) (Increase)/Decrease in working capital based on CF statement 2011 2012 2013 2014 Change in inventories (5,308) (7,633) (7,837) (6,890) Change in accounts receivable (2,893) (3,024) (5,080) (1,427) Change in accounts payable Change in provisions Change in other current assets Working capital change (818) 4,074 4,880 1,184 367 (992) 1,109 594 24 3 25 (59) (8,628) (7,572) (6,903) (6,598) (Increase)/Decrease in invested capital based on CF statement 2011 2012 2013 2014 Acquisition of PP&E Proceeds from disposal of non-current assets Invested capital change (726) (844) (431) (653) 117 71 15 66 (609) (773) (416) (587) > Etalon Group 40 40#42Etalon Group Limited Redwood 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] 41 ==