Acquisition of 50% interest in the construction project “Business - park”:

Retail and office complex with hotel, elite apartments and underground parking

in Perm, ul. Kommunisticheskaya 73

2

TABLE OF CONTENTS

§ Summary of investment offer 3

§ Project description 4

§ Marketing concept of the “Business - park” 5

§ Investment offer 6

§ Schedule of investor’s cash disbursment 7

§ Sales plan and exit strategy of the “Business - park” 8

§ Terms of payment of the Project 9

§ Project model of the “Business - park” 10

§ Project status 11

§ Architectural concept and technical planning 12

§ General contractor 13

§ Concept development and market analysis 14

§ Hotel operator 15

§ Location of the land plot 16

§ Neighbouring objects to the land plot 17

§ Plan of the land plot 18

§ Pictures of the land plot 19

§ About Perm 20

§ Contact data 21

3

SUMMARY OF INVESTMENT OFFER

OFFER: we offer to acquire 50% interest in construction project “Business - park”: commercial and office complexwith hotel (4-5 stars), elite apartments and underground parking.Cost of 50% interest in the construction project “Business-park” – 50 million EUR.PROJECT DESCRIPTION: it is planned to construct qualitative multifunctional complex with total area 120 000 sqm, allelements of the complex will have synergetic effect:- Office (area 20 000 sqm), hotel (200 hotel rooms under management of the international hotel operator Sheraton) andresidential areas (elite apartments 15 000 sqm) will attract a large number of solvent customers into the shopping centre(area 40 000 sqm),- Office centre will contribute to hotel room occupancy, retail segment will create well-developed infrastructure for thewhole Project.,- Underground multilevel parking: (area 27 000 sqm) will demanded by hotel guests, visitors of retail and office centres andapartments owners.

Business-park wil be constructed on the land plot with area 2,05 hectares, located at the address: Perm, ul.Kommunisticheskaya, 73a.The land plot is situated in the central part of the city, on the crossing of Kommunisticheskaya and Popova streets, in thecentre of business activity, in the immediate proximity to the Kama bridge.There are headquarters of many large corporations and city administration, Perm Regional Government, as well as Dramatheatre, Oper and ballett theatre, Art gallery and Exhibition Hall.Today there are not similar projects and similar land plots in Perm.-EFFECTIVENVESS OF THE PROJECT:- Total investment volume of the Project is 196,7 million EUR (including 75 million EUR – funds ofPermGrazhdanStroy, 50 million EUR – funds of INVESTOR, (32,5 million EUR for Projrct realization, 17,5 milion EUR –funds of PermGrazhdanStroy), 89,2 million EUR – funds of credit institutes- Profit from sale of all objects of business-park, short term leasing and VAT repayment 363,2 million EUR.- Net profit from project realization minus all taxes, including VAT repayment 227,9 million EUR (includinginvestor’s profit – 114 million EUR)- IRR of the Project for INVESTOR – 39,1% Multiple 2,28.

4

PROJECT DESCRIPTION

§ Project: Retail and office centre with hotel, elite apartments and underground parking

§ Total gross area: 120 000 sqm

§ Office area: total area – 20 000 sqm, leasable area - 15 300 sqm

§ Retail area: Total area – 40 000 sqm, leasable area - 31 500 sqm

§ Hotel: 200 rooms, 4-star (area - 15 000 sqm)

§ Elite apartments (area - 15 000 sqm)

§ Underground parking with several parking levels: (area – 27 222 sqm) 1 184 parking places (extension is possible)

§ Russia, city: Perm

§ Land plot: 2,05 hectares, including 1,7 hectares in freehold, no incumbrances, 0,35 are being acquired.

§ Location: The land plot is situated in the heart of Perm city, opposite to Lenina Street, one of the mainstreets of Perm. There are buildings of Legislative Assembly and Perm Regional Government,headquarters of many large corporations, bank offices, the Drama theatre, the Organist Hall,shopping centers, City esplanade in front of the project land plot.

5

MARKETING CONCEPT OF THE “BUSINESS-PARK”

Area type Target tenant \ buyer categories

Shopping center • Department store under international brand (anchor): Marc & Spencer, Kaufhof …• Big clothing store under international brand (anchor): Koenen, Peek & Cloppenburg …• Premium supermarket (anchor)• Clothing and common articles net stores under international and Russian brands

(business class): Zara, Hallhuber, Gizia, Morgan De Toi …• High-end boutiques: Versace, Dior, Escada … • Food court (business class)• Cinema, bowling, entertainment area

Office • Representatives of Russian and international corporations• Banks, investment companies• Law companies• Consulting companies• Representatives of insurance companies• Offices of leading Perm corporations

Hotel 4 – 5 star hotel with 200 hotel rooms under management of international professional operator with international well-known brand

Elite apartments Perm citizens with upper-middle and high income

Underground parking • Shopping center operator and separate stores tenants• Office center tenants• Hotel• Elite – apartments owners• Tenants of near-by offices

6

INVESTMENT OFFER

PGS invests project land plot

(estimated market value75 million EUR)

Investor invests50 million EUR

(including 32,5 million EUR in the project,

PGS transfers 17,5 million EUR )

Project Joint Venture with total equity of107,5 million EUR

Debt financing of the construction cost89,2 million EUR

46% of the total project cost, Term Sheet currently in advanced negotiations with 3 Russian Banks)

Export refinancing of around 50% of construction cost through major

international western bank (currently in negotiations with several German banks)

50% 50%

7

SCHEDULE OF INVESTOR’S CASH DISBURSEMENT

Investor equity use (1 435 million EUR):

• Finishing of the relocation and acquisition of additional land plots with area 0,35 hectares – 9,14 million EUR.

• Project documentation (architectural concept, project documentation, construction documentation) 4,6 million EUR.

• Utilities and infrastructure contracts - 5,16 million EUR.

• Shell and core costs – 6,7 million EUR.

• Payment of interest on debts in construction period – 14,3 million EUR

1 q. 09 2 q. 09 3 q. 09 4 q. 09 1 q. 10 2 q 10 3 q. 10 4 q. 10 1 q. 11 2 q. 11 3 q. 11 4 q. 11

Relocation of the territory (acquisition of the additional land plots)

4 112 4 112

Рbuilding permit 938 938Working draft 938 938

Infrastructure costs 2 313 2 313Interest on credit 0 383 765 1 133 1 486 1 824 2 147 2 454 2 747 3 025

TOTAL 8 300 8 300 0 383 765 1 133 1 486 1 824 2 147 2 454 2 747 3 025

Name 2009 2010 2011

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SALES PLAN AND EXIT STRATEGY OF THE “BUSINESS-PARK”

Maximum profit will be reached through the following exit strategy:

Office building and shopping center will be sold to well - known international institutional fund 2 quarters after the complex commissioning

• Long term lease contracts with well-known tenants for at least 75% of the lettable area• Long term lease contracts (5-10 years) with anchor tenants (around 45% - 50% of the whole area) will be signed January 2009 –

December 2009• Brokerage agreement with professional international broker with great experience in Russian Federation (candidate is JLL)• Long term lease agreements will be signed all tenants till the end of the construction period• Sale tender will be managed by well-known international broker with wide experience in Russian Federation (candidate is JLL)• Sale tender preparations will be done before the building is commissioned• PGS is already negotiating with several international well-known investment funds potential forward-purchase agreement• It is possible to sign forward-purchase agreement with international well-known investment fund before the construction works

start.

Sale of the hotel to the well known international institutional fund specializing in hotel real estate in 1-2 years after the complex commissioning

• Maximum sale profit will be reached after the 1-2 years hotel stabilization period• It is possible to sign a forward-purchase agreement for the hotel with the discount before the end of construction period (2008 -

2011) to cover the debt interest• Sale tender will be managed by well-known international broker with great experience in Russian Federation (candidate is JLL)

Elite apartments will be sold to private owners in first 2 quarters after the complex is commissioned

• Pre-sales agreements (with small initial pre-payment) will be signed for about 46% of all units during the construction period (2009-2011)

• Final sales agreements and rest sales is planned for first 2 quarters after the complex is commissioned• Sales and marketing through professional well-known local residential broker• It is possible to use residential pre-sales to cover debt interest

9

TERM OF PAYMENT OF THE PROJECT

TOTAL COMPLEX AREA 120 000 sqmCONSTRUCTION COST PSQM (VAT) 850 EURPROJECT CONSTRUCTION AND SELLING TIME 4 yearsTOTAL BUSINESS PRICE OF THE PROJECT "BUSINESS-PARK" 336 224 750 EUR

TOTAL HOTEL AREA (4-5 STARS) 15 000 sqmROOM NUMBER IN HOTEL 200HOTEL ROOM RATE 180 EURPROFIT FROM ADDITIONAL SERVICES PER 1 ROOM 103 EUROCCUPANCY RATE 70%EBITDA (HOTEL) 6 187 775 EURPRICE OF BUSINESS HOTEL (CAP RATE 9%) 68 752 750 EUR

TOTAL OFFICE AREA CLASS "A" 20 000 sqmLEASABLE OFFICE AREA 15 300 sqmRENT PER YEAR PSQM. (net of VAT, insurance, EBITDA and public utilities)

400 EUR

BUSINESS PRICE OF ALL LEASABLE OFFICE AREAS (CAP RATE 9%) 68 000 000 EUR

TOTAL RETAIL AREA 40 000 sqmLEASABLE RETAIL AREA 31 500 sqmRENT PER YEAR PSQM. (net of VAT, insurance, EBITDA and public utilities)

425 EUR

BUSINESS PRICE OF ALL LEASABLE RETAIL AREAS (CAP RATE 9%) 148 750 000 EUR

SALABLE AREA OF ELITE APARTMENTS 15 000 sqmNUMBER OF APARTMENTS 100PRICE OF ELITE APARTMENTS IN 2011 PSQM 2 750 EURPRICE FOR SALABLE AREA OF ELITE APARTMENTS 41 250 000 EUR

SALABLE PARKING AREA 27 222 sqmNUMBER OF PARKING UNITS 1 184PRICE OF A SALABLE PARKING UNIT 8 000 EURPRICE OF ALL SALABLE PARKING UNITS 9 472 000 EUR

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PROJECT MODEL OF THE BUSINESS - PARK

3 Q. 08 4 Q. 08 1 Q. 09 2 Q. 09 3 Q. 09 4 Q. 09 1 Q. 10 2 Q. 10 3 Q. 10 4 Q. 10 1 Q. 11 2 Q. 11 3 Q. 11 4 Q. 11 1 Q. 12 2 Q. 12

1 Total profit from the business sale, thousand EUR

336 225 0 0 0 0 1 238 1 238 1 650 2 063 2 475 2 888 3 300 3 713 4 125 4 538 7 013 301 987

Hotel 68 753 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 68 753Apartment 41 250 0 0 0 0 1 238 1 238 1 650 2 063 2 475 2 888 3 300 3 713 4 125 4 538 7 013 7 013Number of sellable apartments 100 0 0 0 0 3,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 11,0 17,0 17,0Office 68 000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 68 000Retail 148 750 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 148 750Parking 9 472 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 9 472

2. Total rent(before tax, insurance, EBITDA, public utilities), thousand ruble

13 231 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 616 6 616

Hotel 3 051 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 526 1 526Office 3 060 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 530 1 530Retail 6 694 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3 347 3 347Parking 426 0 0 0 0 0 0 0 0 0 0 0 0 0 0 213 213

3 Total investment costs thousand EUR net of VAT

193 593 75 000 0 7 661 7 661 9 818 9 818 9 825 9 831 9 837 9 843 9 849 9 855 9 862 10 097 105 4 530

Land plot aquisition 75 000 75 000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Relocation (additional land plot aquisition) 8 224 0 0 4 112 4 112 0 0 0 0 0 0 0 0 0 0 0 0

Construction concept 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Building permits 1 589 0 0 794 794 0 0 0 0 0 0 0 0 0 0 0 0Working draft 1 589 0 0 794 794 0 0 0 0 0 0 0 0 0 0 0 0Infrastructure costs 3 920 0 0 1 960 1 960 0 0 0 0 0 0 0 0 0 0 0 0Total project preparation costs net of VAT 90 322 75 000 0 7 661 7 661 0 0 0 0 0 0 0 0 0 0 0 0Shell & core 86 441 0 0 0 0 8 644 8 644 8 644 8 644 8 644 8 644 8 644 8 644 8 644 8 644 0 0Starting 212 0 0 0 0 0 0 0 0 0 0 0 0 0 212 0 0Cost for construction management 4 080 0 0 0 0 408 408 408 408 408 408 408 408 408 408 0 0Total hard cost, net of VAT 90 733 0 0 0 0 9 052 9 052 9 052 9 052 9 052 9 052 9 052 9 052 9 052 9 264 0 0Brokerage 5 043 0 0 0 0 19 19 25 31 37 43 50 56 62 68 105 4 530Marketing 1 071 0 0 0 0 107 107 107 107 107 107 107 107 107 109 0 0Financing contract execution 2 141 0 0 0 0 214 214 214 214 214 214 214 214 214 219 0 0Contingency 4 283 0 0 0 0 427 427 427 427 427 427 427 427 427 437 0 0Total project soft cost, net of VAT 12 538 0 0 0 0 766 766 772 779 785 791 797 803 810 833 105 4 530

4. VAT Cash flow, thousand EUR (+inflow, - outflow)

-5 245 0 0 -639 -639 -1 767 -1 767 -1 768 -1 770 -1 771 -1 772 -1 773 -1 774 -1 775 -1 817 1 172 12 615

Paid VAT 19 866 0 0 639 639 1 767 1 767 1 768 1 770 1 771 1 772 1 773 1 774 1 775 1 817 19 815VAT repayment 2 382 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 191 1 191Selling of VAT return from credit, including discount

12 239 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 12 239

5. Project deficit (surplus) (including VAT), thousand EUR

24,2% 1,83 150 618 -75 000 0 -8 300 -8 300 -10 348 -10 348 -9 943 -9 538 -9 133 -8 727 -8 322 -7 917 -7 512 -7 377 14 695 316 688

6. Project financing, thousand EUR 85 426 75 000 0 8 300 8 300 10 348 10 348 9 943 9 538 9 133 8 727 8 322 7 917 7 512 7 377 -14 695 -80 644

PGS funds 75 000 75 000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Banking credit 89 165 0 0 0 0 10 348 10 348 9 943 9 538 9 133 8 727 8 322 7 917 7 512 7 377 0 0Debt repayment -89 165 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -11 397 -77 768Interest -22 139 0 0 0 0 0 -383 -765 -1 133 -1 486 -1 824 -2 147 -2 454 -2 747 -3 025 -3 298 -2 876Investor's funds 32 564 0 0 8 300 8 300 0 383 765 1 133 1 486 1 824 2 147 2 454 2 747 3 025 0 0

7. Cash Flow balancing, thousand EUR 236 044 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 236 044

8. Total Cash Flow (before profits tax), thousand EUR

26,3% 2,19 128 479 -75 000 0 -8 300 -8 300 0 -383 -765 -1 133 -1 486 -1 824 -2 147 -2 454 -2 747 -3 025 0 236 044

9.1 Profit tax (Russia), thousand EUR 2 857 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 857

9.2 Profit tax (off-shore), thousand EUR 5 310 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5 310

11.Project Cash Flow (after profit tax), thousand EURe

25,1% 2,12 120 312 -75 000 0 -8 300 -8 300 0 -383 -765 -1 133 -1 486 -1 824 -2 147 -2 454 -2 747 -3 025 0 227 877

11. Project Cash Flow for Investor, thousand EUR

39,1% 2,28 63 938 0 0 -8 300 -8 300 -17 436 -383 -765 -1 133 -1 486 -1 824 -2 147 -2 454 -2 747 -3 025 0 113 938

12. Project Cash Flow for Bank, thousand EUR 15,6% 1,30 22 139 0 0 0 0 -10 348 -9 965 -9 177 -8 404 -7 647 -6 904 -6 176 -5 463 -4 765 -4 352 14 695 80 644

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INDEX IRR Multiple

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2011 20122009 2010

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TOTAL2008

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PROJECT STATUS

• 1,7 hectares of project land plot is in freehold

• For the rest, 0.35 hectares of land plot, there are sales and relocation agreements

• Local architects created an architectural concept, we have already received technical specifications and building permit

• PermGragdanStroy signed a contact with leading German architectural bureau Braun Schlockermann Dreesen Planungsgesellschaft GmbH for development of architectural concept.

• Currently in negotiations with large western investment funds on the purchasing of the future complex

• Negotiations with large Russian and western banks on the construction financing are on the final stage

• Signed the preliminary Term Sheet for general contractor agreement with STRABAG AG

• In June PGS has signed the Term Sheet and LOI with Starwood on hotel and a part of apartments management contract under the brand Sheraton

• In April 2008 PGS has signed a contract with international real estate broker and consultant Jones Lang LaSalle. The full analysis of the Perm real estate market and improve the concept of business-park

12

ARCHITECTURAL CONCEPT, TECHNICAL AND ECONOMIC EVALUATION

PermGrazhdanStroy signed a contact with leading German architectural bureau

Braun Schlockermann Dreesen Planungsgesellschaft GmbH

for development of architectural concept (stage PP).

Delivery date: Architectural concept (stage PP) – 2008.

Project, technical and economic evaluation (stage P) - 1. q. 2009.

Specification technical documents (stage RD) – 1.q. 2009.

We cooperate closely with Russian architects for their regional know-how.

13

GENERAL CONTACTOR

Signed the preliminary Term Sheet for general contractor agreementwith

STRABAG AG

• PermGragdanStroy approached leading European construction companies.

• Discussed the conditions of the LOI for future general contract agreement.

• We appreciate experience and know-how of our western partners and entrust them execution and quality control of construction work.

14

CONCEPT DEVELOPMENT AND MARKET ANALYSIS

In April 2008 PGS signed a contract with international real estate brokerand consultant Jones Lang LaSalle.

Jones Lang LaSalle

Jones Lang LaSalle analysed and increased the effectiveness of the marketstrategic of the “Business-park”

Jones Lang LaSalle analyzed Perm commercial and residential real estatemarket for improvement of Project concept

Jones Lang LaSalle questioned potential anchor tenants of our Projectand recognized a great interest in our Project among western and Russianlarge tenants. In the middle of 2009 we will sign notes of intent with most ofanchor tenants of our Project.

Professional western brokerage and consultant agency will carry out rentbrokerage of office and retail areas of our Project.

15

HOTEL OPERATOR

• Average room rate growth in Perm in 2007: 10,5%

• Currently there is only one hotel in Perm with official certification

• At this moment there is no hotels in Perm under professional international management with international brand

• PGS has signed Term Sheet and LOI with Starwood on hotel management contract under the brand Sheraton

• Sheraton Hotels & Resorts is the Starwood’s largest brand serving the needs of luxury and upscale business and leisure travelers worldwide. Sheraton offers the entire spectrum of comfort. From full-service hotels in major cities to luxurious resorts by the water, Sheraton can be found in the most sought-after cities and resort destinations around the world.

Number of Properties Rooms

North America 450 153,700

Europe, Africa and the 264 64,600

Pacific 124 41,800

Latin America 58 12,400

Total 896 272,500

Number of Properties Rooms

Managed and unconsolidated joint venture hotels 426 142,000

Franchised hotels 360 95,800

Owned hotels(a) 85 27,800

Vacation ownership resorts and residential properties 25 6,900

Total properties 896 272,500

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LOCATION OF THE LAND PLOT

The only bridge in the center of the city to the other side of the river – very heavy trafficed–

Main train station

Komsomolsky prospektone of the main –streets of Perm

ul . Lenina –one of the main streets of Perm

Land plot

2nd train stationBridge

Kama - river

17

NEIGHBOURING OBJECTS TO THE LAND PLOT

Komsomolskyprospekt – oneof the main streetsof Perm

ul. Lenina – oneof the main streets of Perm

Drama theatre

Shopping centre

Office

Park

Park

Park

Land plot

The only bridge in the center of the city to the other side of the river – very heavy trafficed

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PLAN OF THE LAND PLOT

Участок

ул. П

опов

а

ул. Коммунистическая

ул. О

синс

кая

ул. Советская

Project land plot

Pop

ova

str.

Kommunisticheskaya str.

Osi

nska

ya s

tr.

Sovetskaya str.

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PICTURES OF THE LAND PLOT

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ABOUT PERM

§ Perm is one of the biggest industrial centres of the Russian Federation

§ Population: more than 1 million people (The Perm Region population amount to more than 3 million people)

§ City area: 800 sq. km., length of the city along the river is 65 km

§ Personal income increase in 2007: 30,2%

§ Industrial production increase in 2007: 17,3%

§ Average income in 2007: 600 USD per person (monthly)

§ New construction in Perm in 2007: 485 000 sq. m. (+12% increase)

§ City direct investment volume in 2006: 85,6 million € (+8% increase)

§ Key industries: aircraft, electrical, chemical and oil-refining industries, mechanical engineering