EXPANDING THE BOUNDARIES OF TOURISM

WORLD TOURISM INDUSTRY DATA

WHY CAUCASUS?Russia is expected to become one of the top ten destinations in the world by 2020 with 40 million visitors —

— International tourist traffic to Caucasus resorts increasing by 10% annually

— Rising demand for vacation from Russian visitors due to progression of middle-class up to 20% annually

— Resorts ideally positioned to draw Russian and European visitors and benefit from increasing demand for ski leisure in Asia and the Gulf

EXCEPTIONAL NATURAL ENVIRONMENT

MAIN RUSSIAN EVENTS2014 WINTER OLYMPICS IN SOCHI

THE 2018 FIFA WORLD CUP

INTRODUCTION

— With the upcoming 2014 Olympic Winter Games in Sochi and 2018 FIFA World Cup also in Russia, the great potential of the North Caucasus is about to be revealed

— Russian Government has established a dedicated development company, Northern Caucasus Resorts (NCR), to carry out the largest mountain tourism project in the world

— Requiring up to $30 billion ininvestments, the Project involves the creation of five world-class ski resorts, 120 km of beach recreation and health & wellness resorts offering a large variety services

—

To capitalize on international know-how in the mountain tourism sector, NCR has set up a partnership with the Caisse des Depots et Consignations (CDC), France, and Korean Western Power, Korea

— Sberbank and Vnesheconombank, the largest banks in Russia, are partners in the Project

—

Scheduled to open progressively, the first stage of the resorts will be between January 2013 and December 2015

KEY INVESTMENT CONSIDERATIONS

STRONG OFFICIAL SUPPORT — Russian Government to develop the region and improve the overall

environment through a $100bn economic and social renewal strategy

—

Simplified approvals and highly favorable land, corporate and VAT tax regime

—

$2bn of investments from the Russian Government through NCR in the Project infrastructure

— State guarantees for up to 70% of investments for non-commercial risks

— Establishment of Special Economic Zones administered by NCR as single point of contact for investors

— Consistent official responsiveness for adjusting legislative and regulatory base to keep pace with development project’s needs

INSTITUTIONAL SUPPORT

FAVORABLE TAX REGIME

— Creation of a special economic zone around the resorts with favorable tax regime

— Corporate tax: from 0% to 13.5% till 2023 (instead of 20%)

— Land tax: 0% for 5 years

— Accelerated regime for depreciation

— Social taxes for resident entities reduced to 14% till 2017 (instead of 34%)

— Property tax: 0% for 10 years

EXCEPTIONAL NATURAL ENVIRONMENT — Chain of most unspoilt European mountains stretching 1,200km from the Black

Sea to the Caspian - breathtaking contrast between warm seashores and permanent glacial snows

— Mt. Elbrus, the tallest peak in Europe, stands at 5,642m

— Caucasus State Natural Biosphere Reserve included in the UNESCO World Heritage List

— Long ski season spanning October to June

— Numerous mineral springs create thermal and spa facilities for summer- winter health and wellness tourism

KEY INVESTMENT CONSIDERATIONS

PRIME LOCATION TO BENEFIT FROM GROWING DEMAND FOR SKI LEISURE IN RUSSIA, ASIA AND THE GULF

2 hours’ of flight from the Gulf3 hours’ of flight from Central Europe

POTENTIAL RESORTS CHARACTERISTICS

All figures are preliminary and will be defined at stage of planning / construction

Main characteristics

Resort

Lagonaki Arhyz Elbrus-Bezengi Mamison Matlas Total

Length of ski slopes 279 km 263 km 165 km 196 km 147 km 1050 km

Number of lifts 54 54 28 50 22 208

Total capacity of resort, people/day*

28.000 45.000 29.000 30.000 18.500 150.500

Total number of beds 28.180 24.000 15.000 25.000 7.300

Elevation differences 1609-2450 1453-3071 1944-4164 2017-3732 1805-2767

* Capacity of ski slopes is 60% of the total capacity of resorts

Implementation of the Caspian sea coastal cluster to the project for the development of a tourism; cluster

SPECIAL ECONOMIC ZONES

A SKI RESORT OPERATIONAL SCHEME (EXAMPLE)

SCHEMA FOR INTERNATIONAL INVESTMENS

INVESTMENTS IN LAGONAKI

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 -

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Touristic traffic Hotel revenue, th. Euro Ski revenue, th. Euro

INTERNATIONAL CAUCASUS DEVELOPMENT (ICD) A French - Russian joint venture

OJSC NORTHERN CAUCASUS RESORTS (NCR)

CAISSE DES DEPOTS (CDC)

51% 49%

AAA rating

6,5% by Vnesheconombank — — Owned 93,5% by the Russian state and Key French public institution in the

financial sector and Sberbank —

— Consolidated assets of €269.5bn — Headquarters in Moscow, $2bn equity capital —

— Chairman A.G. Bilalov, vice-president

Experience of large infrastructure and sustainable development projects through subsidiaries Egis and CDC Infrastructuresof the Russian Olympic Committee

French Joint Venture

INTERNATIONAL CAUCASUSDEVELOPMENT (ICD)

ORGANIZATION MISSIONS

Memorandum of Understanding signed Conducting surveys in September 2011 in Sochi:

— Monitoring of the project

—

— Russian-French Joint-Venture

Coordination of sub-contractors

—

Staff : ca 25 persons

— Coordination of investments —

Technical board includes leading international mountain experts Relationships with investors

— JV Agreement

French Joint Venture