www.scmholding.com NEWSOctober 2012

SCM Announces Financial Results for 2011

SCM keeps demonstrating energy business’ revenue going good progress despite the up 63%. continuing economic down- SCM CEO Oleg Popov turn affecting much of Europe. Indicator 2011 2010 welcomed the results, saying SCM´s financial results for the good progress in 2011 2011 give clear evidence of Assets 28.466 22.675 came partly from a favourable that. market environment and The Group says that business continued consolidation of 2011 SCM RESULTS growth has been driven by Gross revenue 19.542 12.819 new businesses under the the return on investment management companies, in organic development Profit 3.128 1.299 Metinvest and DTEK. and upgrade of the existing He added, “Along with that businesses as well as we enjoyed a strong return on continued consolidation of Profit tax 0.870 0.449 our multi-million investment new businesses under the in development and upgrade Group’s steel and energy of our companies in 2011. holdings, Metinvest and DTEK. 4Consolidated financial performance of the SCM Group, U.S.$ billion We are happy with last year’s In addition, its improved performance and plan to financial performance also end of this year there are plans international audit company. re-invest our profit to further comes from better results to invest $2bn and $20m in The financial results show modernise businesses, ensure achieved by Metinvest and modernisation and social that the Group’s assets totalled the professional development DTEK. projects respectively. some $28.466bn compared of our employees and improve SCM believes that the results The IFRS financial state- with $22.675bn in 2010. social infrastructure in the will enable the Group to ramp ments for 2011 were audited Consolidated gross revenue regions of our operations. up investment in production, by PricewaterhouseCoopers, came to $19.542bn compared These efforts will make SCM modernisation and social the eighth successive to $12.819bn in 2010, with even more competitive projects in those regions in year SCM’s financial data SCM’s steel business showing domestically and inter- which it operates. Before the have been overseen by an a 51.6% revenue growth and nationally.” DTEK Purchases Russian Coal Mines DTEK, SCM’s energy holding, has and a coal processing plant. ensure the exportable quality of shortage of anthracite supply made its first coal acquisitions Sales of high-sulfur coal the coal portfolio in line with EU in the European market caused outside by closing from Ukrainian mines mixed sulfur content standards (less by mine closures in a deal in Rostov Oblast with low-sulfur coal from the than 1%). Thus, Ukraine can and . () to buy three mines acquired Russian mines will help fill the annual 2.5m-tonne >> Continued on Page 2 DTEK COAL ACQUISITIONS COAL DTEK

DTEK Takes Step into the FUIB Named Best Ukrainian SCM to Build International ESTA - SCM’s Real Estate Future Page 2 Banking Group Page 2 School in Page 3 Holding Page 4 Page 1 NEWS October 2012 >> Continued from Page 1 DTEK Purchases Russian Coal Mines

DTEK CEO Maxim Timchenko said, “The This will help prevent fuel shortages in acquisition of the companies in the Rostov winter. We will be able to enhance the region will expand DTEK’s resource base efficiency of electricity generation by and improve the quality of the coal supplied TPPs and significantly reduce hazardous to Ukrainian thermal power plants (TPPs). emissions.” DTEK Signs Framework Agreement for Electricity Supplies to the Russian Federation DTEK, the largest Ukrainian energy company, opens a new chapter in the history of has signed a framework agreement with cooperation between our companies. Russian INTER RAO UES for electricity DTEK has started a new era in the history supplies to the Russian Federation. of the Ukrainian power industry. As of DTEK COAL ACQUISITION COAL DTEK Under the deal, the company will have today, after a long break, our country is the ability to commence cross-border supplying electricity to all neighbouring power supplies to INTER RAO UES, a leader countries where such deliveries are in the Russian power market. technologically possible. The growth Reaction to the deal came from Andrey of Ukrainian electricity exports Favorov, DTEK’s Commercial Director, facilitates the development of Ukrainian who commented, “This agreement generation and coal industries.” 4DTEK power lines FUIB Named Best DTEK Takes Step into the Future

Ukrainian SCM’s energy holding, DTEK, has taken a Ukrainian cities and in the long term step into the future by partnering with design a concept to introduce individual Banking Group NIKO Trade House, the official importer electric cars in large Ukrainian cities. First Ukrainian International Bank (FUIB), a of Mitsubishi in Ukraine, to explore the The move was welcomed by Alexander part of SCM Group, has been awarded first outlook of the electric vehicles (EV) Tolkach, DTEK’s Director for External place in the Best Banking Groups category industry in Ukraine. Affairs, who said, “DTEK strives to develop in Ukraine in the 2012 Banking Awards. The first three Mitsubishi innovative new energy technologies and the use of The award was made by the prestigious electric vehicles (i-MiEV) were handed EVs in Ukraine fits well into the concept. International business publication, World over to the company in Donetsk as part Use of EVs is still a pilot project but, if it Finance. The World Finance Banking Awards of the deal. proves to be a success, this will become are known throughout the financial press as A charging infrastructure will be built a part of our environmental programme the pinnacle of recognition for major banks. to support their day-to-day use. The joint and may lead to changes not only in the “The World Finance award is an project will collect practical information current car and petrol station model, but important recognition of our performance on EVs and infrastructure operation in in the whole electricity network.” by the international community”, said Konstantin Vaysman, Chairman of FUIB’s Management Board. “FUIB consistently strengthens its leading positions in the local market as one of the best banks by sustainability, reliability and profitability, which is repeatedly recognised by both investment analysts and the media.” Separately, another important industry benchmark publication, The Banker, ranked FUIB as one of the largest world banks for the third year running. In The Banker’s TOP 1000 World Banks 2012 FUIB climbed 53 positions to 926th place and significantly improved its previous year results.

FUIB BEST BANKING GROUP Commenting on this achievement, Mr Vaysman went on to say, “FUIB’s accomplishments are recognised globally, which reaffirms our competitive stance and is beneficial for reinforcing our foreign partnerships.” 4One of the Mitsubishi electric vehicles in DTEK’s corporate car fleet Page 2 NEWS October 2012 New Metinvest Group Supervisory Board Chairman Appointed

On 13 June 2012 Amir Aisautov, SCM’s a Supervisory Board member. Director of Mining & Metals Business According to Oleg Popov, “There Development, was appointed the are two main reasons that stand Chairman of the Supervisory Board of the behind decisions for SCM’s directors Metinvest Group. Previously he served to chair Supervisory Boards of our key as a member of the Metinvest Group businesses. First, it is SCM’s commitment Supervisory Board. Since November 2009 to keeping focus in every core business Amir Aisautov has been responsible for of the Group’s portfolio that has grown the development of the SCM Group’s considerably. Second, it’s a strong team mining and metals business dealing of directors that SCM has built over with strategy, investment, finance and the past few years. The move will help

risks. me as the chief executive of the NEW APPOINTMENT Currently, the Supervisory Board management company to concentrate of the Metinvest Group has ten on management of SCM’s whole business members including three independent portfolio and keep strategic focus of directors. SCM CEO Oleg Popov, the Group.” 4Amir Aisautov, SCM Director of Mining & the outgoing Chairman, will remain Metals Business Development

Metinvest Annual SCM to Build International School in Donetsk Report 2011 The first international school in Donetsk Grigorivska will create more than a will open its doors on 1 September 2014 hundred of jobs, with a mixture of new Last year was another extremely successful thanks to a new initiative from SCM. international and Ukrainian appointments one for SCM’s metal and mining business SCM announced on 9 August 2012 the (over 50%) to be made. Enrolment of Metinvest, as the Group delivered solid plans to build the first international school students from ages 3 to 18 will be on a results across all business lines despite the in Donetsk - Grigorivska International fee paying basis, but with a reserve to economic challenges faced worldwide. School. provide some discounted places and Metinvest’s strong financial performance The project will be realised without grants. The capacity of the school will be resulted from a measured approach to governmental funding with investor 600 students. conducting mergers and acquisitions, contributions that will amount to at least “We believe in the huge potential of an increase in capital expenditure while $15m. SCM Group (75%) and Ukrinvest Ukraine. To unleash it, Ukrainian children maintaining operational efficiency and a (25%) are shareholders of Grigorivska should receive top-class education in continued conservative borrowing policy. School on a partnership basis. Ukraine, and not only in the capital but Grigorivska will be the first school in other regions as well,” said Project Please read and download Metinvest’s Annual in Donetsk to teach Ukrainian and Manager Natalia Gnilitskaya. Report 2011 at: international curricula. School graduates The official website of the Grigorivska www.metinvestholding.com/en/investors/reports will get Ukrainian and international International School can be found here: diplomas. www.grigorivska.com SCM TO BUILD SCHOOL TO SCM

4 An artists’ impression of the Grigorivska International School Page 3 NEWS October 2012 Metinvest Repays Record Loan

Metinvest B.V., the parent company of the strong confidence in Metinvest’s business international vertically integrated steel case and financial position. The annual and mining group (further – “Metinvest”), instalments including interest expenses has fully repaid a U.S.$1.5bn facility arranged were accurately paid by Metinvest by a syndicate of 16 banks in July 2007. throughout the crisis of 2008-2009 and It was the record ever borrowed in the up to now. By repaying the loan in full credit history of Metinvest and the largest and on time, Metinvest reaffirmed its loan attracted by a private firm in Ukraine reputation as a sustainable business and in 2007. a highly reliable borrower.” Sergiy Novikov, Metinvest’s Chief Deutsche Bank AG (Amsterdam), ING Financial Officer, said, “We managed to Bank N.V., ABN Amro Bank N.V. and BNP raise the facility on favourable terms, Paribas (Suisse) SA acted as Lead Managers which was acknowledgement of investors’ and Bookrunners of the syndicate. METINVEST REPAYS LOAN METINVEST REPAYS

Follow SCM Directors insights at blog.scm.com.ua 4Donbass Palace and Pushkinsky Complex in Donetsk GROWTH AND AUSTERITY: A COMPLEX POLICY MIX Jock Mendoza-Wilson, Director of International and Investor Relations, provides his ESTA - SCM’s insights from the World Economic Forum on the Middle East, North Africa and Real Estate Holding Eurasia 2012. 4ESTA Group is a group of companies that “How does uncertainty in the Eurozone impact the countries outside? manages real properties of the SCM Group. Well, Ukraine for instance is a very open economy with significant 4ESTA Holding, the management company trade with the EU and Eurozone countries. If growth in these countries of ESTA Group, is one of the most successful remains low then it will have an impact here as there will be weaker players in Ukraine’s real estate market, investing export demand for Ukrainian produced goods and services that could annually more than $100m in development of slow growth. its real estate portfolio. “If the EU does pull off the complex trick of Growsterity (the phrase comes from the 4ESTA’s core businesses are premium joining of two words, growth and austerity) then its neighbours, including countries commercial property, hotel management and such as Ukraine will also be the winners.” . . . Read more real property management and operation. 4Hotel business includes five-star hotels URBANISATION 2040 Donbass Palace in Donetsk and Opera in Kyiv, Natalia Yemchenko, Director of Public Relations and Communications, shares which are both listed as The Leading Hotels of her impressions on the Rio+20 Corporate Sustainability Forum organised by the the World and regularly win awards, including United Nations Global Compact. the Best Hotel in Ukraine, the Best Business “The ability of people to urbanise in a smart and sustainable way is a Hotel in Ukraine and the Best Hotel in Eastern part of efficient use of the Earth’s resources. Urban development will Europe. The hotel portfolio also includes see more investment – hundreds of billions of dollars – over the next medium-price Park Inn by Radisson Donetsk, thirty years than it has witnessed in its entire history. In the modern which opened in spring 2012. world this huge market should work in the legal landscape that is 4Reconstruction of Kyiv TSUM shopping mall is one of the ESTA’s most promising projects. absolutely different from the one available today.” . . . Read more The architectural design is developed by Benoy, a renowned UK-based architectural firm. TSUM FAIR PLAY, BUSINESS ETHICS AND SPORTING SPIRIT opening is scheduled for spring 2015. Sergey Zuzak, Director of Agricultural Business Development, writes on a 4Commercial property owned and managed transparent choice of supplier. by ESTA Group includes the second stage of “Technical directors of HarvEast decided to replace the desk study of Leonardo Business Centre with an area of more machinery suppliers by a serious ‘entertainment’ – a machinery race. than 38,000 sq m located in Kyiv city centre and Not the Olympics but also quite spectacular, the race consists of several Pushkinsky Complex mixed-use development in events. Thus, in July we watched some harvesters at work: on a signal, Donetsk city centre. the high-power machinery of 350+ hp started a drag race followed by 4In 2011, the total assets of ESTA Group grew SCM CORPORATE BLOGS SCM CORPORATE serious representatives of suppliers who recorded losses in their notebooks and examined 42% year on year to $526.6m. cleanliness of track left by the competitors’ harvesters.” . . . Read more www.estaholding.com

For further information, or to subscribe, please contact: Jock Mendoza-Wilson, Director of International and Investor Relations System Capital Management, 117 Postysheva st., Donetsk 83001, Ukraine [email protected] – www.scmholding.com