#THE_NIZHNY_NOVGOROD_REGION 2018 Guide Investor’s Moscow Saint Petersburg Voronezh Volgograd Yaroslavl Samara Kazan Investor’s Guide Table of Contents 08 Oleg Goshchansky KPMG inRussiaandCIS, Address ofManagingPartner, 06 Timur Khalitov Development Corporation JSC Nizhny Novgorod Region General Director of Opening remarks of 05 Region GlebNikitin Head oftheNizhny Novgorod Welcoming address ofthe 04 Nizhny Novgorod Region Six reasons tochoosethe 10 OPPORTUNITIES INVESTMENT 35 32 25 20 16 14 12 10 Timber Industry Shipbuilding Agriculture Chemical industry Automotive Industry Industrial Potential Area for Investments Novgorod Region about theNizhny General Information

38 64 Region Novgorod The Nizhny INFRASTRUCTURE COMFORTABLE AND COMPETENCES ENVIRONMENT

38 Transport Infrastructure

43 Information Technologies 70 General Information about KPMG 46 Education and Science 48 Investment Infrastructure 72 Contact details 52 GOVERNMENT AND BUSINESS

Business support 52 measures

Nizhny Novgorod Region 59 Development Corporation

62 Public-Private Partnership Investor’s Guide 4 Welcome Address you everysuccess! Nizhny Novgorod Region withminimumrisksandmaximum opportunities! Iwish I amconvinced aquantumleapinthe thatyour businesswillbeabletomake ensure effectiveworkwithinvestors. business. We establishedtheNizhny Novgorod Region DevelopmentCorporationto where specialistsinallareascanbetrained,andalsolegislativeincentivesfor morethan20educationalresourcecentres of technoparksandbusinessincubators, There’s awholerangeofsitestolaunchproductionavailableintheregion,system provide thebestworkingenvironment forinvestors. Region continuesdevelopingtheinvestment infrastructureandisdoingit’s bestto and iseagertominimize theirrisks.TheGovernment oftheNizhny Novgorod At presenttheNizhny Novgorod Region isaregionwhich valuesseriousinvestors doing businessintheNizhny Novgorod Region today. Thatiswhyto salesmarkets. anumberofworld-famouscompaniesarealready major transport corridors, whichtranslatesintologistical benefitsandaproximity Our regionislocatedintheveryheart oftheVolga Region atthecrossroadsof Novgorod Region demonstratestheregion’s vastpotential. The growinginterestofbusinessinimplementinglarge-scaleprojectstheNizhny industrial, scientificandmanpowerresources. country. Itenjoys anexceptional geographicallocationandcandrawonextensive The Nizhny Novgorod Region isoneofthemostrapidlydevelopingregionsour Dear friends, Chairman oftheGovernment Head oftheNizhny Novgorod Region Gleb Nikitin Region GlebNikitin Head of theNizhny Novgorod 5

General Director of JSC Nizhny Novgorod Region Development Region Novgorod The Nizhny Corporation Timur Khalitov

Dear colleagues, Today the Nizhny Novgorod Region is one of Russian most advanced and fastest growing regions with great potential for the development of investments. Thanks to one of the most developed multifunctional industrial complexes in the country, investors will be able to find the suppliers and partners they need in our region, thereby increasing the economic viability of the projects they are implementing. At the same time, the region’s location at the crossroads of the country’s main highways and railways, from north to south and from west to east, provides ideal conditions for logistics. Our advantages include the most acclaimed system of resource centres in Russia, facilitating the training of highly skilled professionals for any industry, a developed infrastructure, a trust-based dialogue with the Government, proximity to the largest sales markets, and regional legislation that fully complies with investor’s requirements. A specialised organisation was created in the region to facilitate interaction between the authorities and the investor according to the one-window system – the Nizhny Novgorod Region Development Corporation. The Corporation assists investors at every stage of implementation of their investment projects and helps them to create the requisite business infrastructure. We take account of the requests of the business community and work every day to improve our support measures. Our goal is to create the best possible environment for investments in the region.

Remarks Welcome to the Nizhny Novgorod Region!

Timur Khalitov General Director of JSC Nizhny Novgorod Region Development Corporation Opening Investor’s Guide 6 Address KPMG inRussia andtheCIS Managing Partner Oleg Goshchansky Good luck! Novgorod Region. starting pointforyour considerationoftheopportunities offeredbytheNizhny risks. Ihopethatthebookletyou areholdinginyour handswillprovide agood examination ofalltheinformationavailableandacomprehensive assessmentof of asiteforinvestment projects.Thisdecisionisalways basedonathorough international businesses,Iamwellaware oftheattentionpaidtoselection formany withbothRussianAs someonewhohasworked years and relations withinvestors basedonrealactionandnotmerewords. most importantly, thatiswillingtobuildtrulyeffective aregionalleadership enabling legislation,skilledstaff, highresearchanddevelopmentpotential,and, offer: afavourable geographic location,developedtransport infrastructure, foreign directinvestments. TheNizhny Novgorod Region hasagreatdealto Today, inthe thisregionranksfirst Volga Federal District(VFD)intermsof Region. We arepleasedtopresentyou thisInvestor’s GuideontheNizhny Novgorod Dear colleagues, Oleg Goshchansky KPMG inRussia andtheCIS, Managing Partner, The Nizhny Novgorod Region7 Investor’s Guide 8 reasons Nizhny Novgorod Region to choose the 2 Nizhny Novgorod tobecomeone ofthelargesttransport hubs in Russia. Petersburg onaverageby25% and55%,respectively. Thiswillenable and durationofcarriage fromNovorossiysk, Vladivostok, andSaint 360 km/hour, andaterminallogisticscentrewillreducethecost railway line,withtrainsoperatingatanexpected maximumspeedof transport corridors. Theconstructionofthehigh-speedMoscow-Kazan The Nizhny Novgorod Region islocatedatthecrossroads oflarge —  *According totheAssociation ofRussian Automakers. —  —  1 that meetallthenecessaryenvironmental standards. potential andhighlyskilledemployees, aswellavailablesites production facilitiesduetotheregion’s highlevelofresearch businesses andalsotheestablishmentoffineorganicsynthesis Favourable environment forthedevelopmentofpharmaceutical substitution potentialofmeatandfruitapprox. 50%); neighbouring regionsforagriculturalproducts(import satisfaction ofbothinternaldemandandthe Development ofuncultivatedarableland(around10%); components variesfrom50%to80%,dependingonthemodels)*; and shipbuildingindustries(thecurrent levelofuseimported Increase inthelocalisationofcomponentsautomotive geographic location Strategically advantageous and highlydiversified economy: The Region’s strong industrial potential 9

3 Highly skilled personnel

The region has a significant potential of human resources. Each year 23,000 specialists graduate from higher education institutions in the Nizhny Novgorod Region, with 30% of technical skills in Region Novgorod The Nizhny high demand in the region. The average salary in the Nizhny Novgorod Region (RUB 30,500) is lower than in Russia’s other major educational centres (RUB 42,500 in Moscow, Saint Petersburg, Ekaterinburg, Novosibirsk and Tatarstan). This provides investors with a competitive advantage when developing industry in the region.

4 High R&D potential

More than 2,500 patents have been registered in the region over the past four years. The region ranks 4th in Russia in the R&D index, and 3rd in terms of the number of cutting-edge production technologies that have been deployed. Investors can leverage the region’s work experience with high-tech and sophisticated production facilities.

5 One of the most investor-friendly regulatory frameworks in Russia

The region grants various incentives to investors that have been enshrined in legislation: the lowest possible regional tax rates; guarantees of legislative non-regression provisions for investors and no increase in the tax burden; and a system of financial support measures making it possible to reduce costs substantially on the implementation of investment projects.

6 Comfortable environment

The Nizhny Novgorod Region has created all the conditions and infrastructure nec- essary to meet the needs of local residents and enable companies to do business. 10 Investor’s Guide General km fromMoscow Nizhny Novgorod is400 *VFD –Volga Federal District Information The Nizhny Novgorod Region 400 km 42 peopleperkm Population density: VFD* of28.6peopleperkm average populationdensityin by train 3 hours 35minutes in VFD* 3 3,235,000 Population

rd in termsofactualarea. regions inCentralRussia One ofthelargest 2 (comparedto by air 45 minutes 2 ) Novgorod Nizhny Penza Region Saratov Region Republic ofMordovia Nizhny Novgorod Region Ulyanovsk Region Republic Chuvash Samara Region Orenburg Region of MariiEl Republic of Tatarstan Republic of Udmurtia Kirov Region Republic Bashkortostan Republic of Perm Territory 11 The Nizhny Novgorod Region The Nizhny Novgorod Region Novgorod The Nizhny Growing market of the Nizhny Novgorod Region GRP*, billion RUB

Kirov Region Nizhny Novgorod GRP growth rate in the Nizhny Novgorod Region Region Republic Perm Territory 1,784 of Marii El

Chuvash Republic +6.7% Republic of Mordovia Republic of Udmurtia

Penza Region Republic 1,466 of Tatarstan Ulyanovsk Region 1,277 1,218 1,182 1,104 Samara Region Saratov Region 1,010

741 925

Republic of Bashkortostan Average

Orenburg Region GRP in VFD 2013 2014 2015 2016 2017 2020 2025 2030 FORECAST

Source: The Ministry of Economic Development and Investments of the Nizhny Novgorod Region.

RUB 30,598 higher than the average in Volga 4.9% Federal District Average salary in the region

Temperate climate (moderate continental climate)

Average temperature Average temperature in January –12 С +21 С in July

*GRP– gross regional product 12

The Nizhny Novgorod Region today is a region which values serious investors and is eager Investor’s Guide Investor’s to minimise their risks. We are one of the first regions in the country where investment projects have been granted priority status by law and are eligible for tax concessions.

Gleb Nikitin Head of the Nizhny Novgorod Region Chairman of the Government investments Area for 13

Foreign investors are actively investing in the Region’s investment projects: st the Nizhny Novgorod Region ranks RUB 1st in Volga Federal District in 1 Region Novgorod The Nizhny terms of foreign direct investments 41 billion

Source: The Central Bank of the Russian Federation, data for 2017.

High investment appeal

One of the three regions in the Volga Federal District confirmed IC3 investment appeal rating in 2017.

Source: National Rating Agency.

Mid-level investment potential and minimal risks

One of the six regions in Russia and one of the four regions in the Volga Federal District that confirmed 2A investment climate rating in 2 0 1 7.

Source: Expert RA. 14 Investor’s Guide Industrial potential Soviet Unionandfarther abroad. The region’s tradingpartners include146 countriesinboththeformer atbothlocalandinternationallevel. consumers The regionhaswell-establishedsalesanddistributionchannelstoend Danieli, Solvay, andothers). implementation intheregion(Liebherr, STADA, Knauf, Bosal,Unilin, Foreign investors havepositiveexperience ofsuccessfulproject Nizhpharm, GKRusskoye Pole, andothers). Krasnoye Sormovo Factory, Volkswagen, AGC,Magna, Heineken, products (ROSATOM, LUKOIL, SIBURHolding,GAZGroup, OMK, B2B interactionbetweencompaniesmanufacturingandsellinghigh-tech in Russia andtheVolga Federal District.Theregionisalsoaplatformfor region’s industrialproductiongrowthratesarehigherthantheaverage industries, ITsector, agriculturalandwoodprocessingindustries.The driven byitsdevelopedautomotive,shipbuildingandpetrochemical dependent federaldistrictsofRussia economy, owingtoitsdiversified risks andlowerdependenceonoilgaspricescomparedtotheoil- The Nizhny Novgorod Region ischaracterized bylowermacroeconomic District(101.1%)) for Russia andVolga Federal 2017 Industrial production indexin

26.4% Industrial structure in2017 Oil refining (above the average index

Source: The MinistryofEconomicDevelopment andInvestments oftheNizhny Novgorod Region 13.9% 104.7% Metallurgy 12.9% Automotive industry 7.2% Chemical industry 6.9% Food industry 5.1% turnover in2017 in foreign trade Electronics in VFD 2

0.7% nd industry processing Wood 26.9% Other 15 The Nizhny Novgorod Region Novgorod The Nizhny

Production growth in the processing industry is indicative of the favourable nd environment for business development 2 in the region and its low dependence on in VFD commodity markets.

RUB million th 1,180,501 7

1,108,422 in Russia 1,073,471 998,185 943,843

The region’s capacity of processing industries ranks 7th in Russia and 2nd in the Volga Federal District 90,996 90,996 91,099 93,738 98,929 123,088 2013 2014 2015 2016 2017

Processing industries Production and distribution of electricity, gas, and water

Source: The Ministry of Industry, Trade, and Enterprise of the Nizhny Novgorod Region 16 Investor’s Guide Automotive industry Growth by region’s plantsin2016 manufactured atthe Sales ofcars potential to develop theirproduction facilities. automotive componentsgives investors the Moreover, thecurrent level oflocalisation components to thesaleofroad-ready cars. a fullvalue chain–from themanufacturing of Novgorod Region’s strategic industries, featuring The automotive industryisoneoftheNizhny economy in theregion’s largest sector RUB 2 nd 24% 150 billion IN 2016,THEREGIONMANUFACTURED: trucks duty vehicles light commercial andmedium buses 10,200 55,800 5,600 +47% by 2015 +3,2% by 2015 +24% by 2015 17

A full production chain is being established for the automotive industry in the region with the potential for the entry of new investors and further localisation of auto component manufacturing.

THE SHARE OF RUSSIAN TRENDS PRODUCTS MANUFACTURED Consolidation of the assets of manufacturers of mechanical

IN the region engineering products and set up of large integrated structures Region Novgorod The Nizhny in mechanical engineering sectors.

Increase in state support for high-tech sectors of the economy. 73% Development of cost-efficient technologies to increase buses margins. The use of information technologies in conventional mechanical engineering is increasing the appeal of the automotive industry by reducing final consumer prices, enabling manufacturers to compete with their foreign 45% freight counterparts. transport (including LCVs) PROSPECTS

Further increase in localisation of the auto component manufacturing, including the establishment of joint ventures.

RUB Special investment contracts for companies localising 38,292 production.

Average salary in the Increase in exports of the industry’s products in order to industry (higher than increase loading of production capacities and, as a result, an increase in demand for automotive components. than the industry average in Volga Federal District (RUB 32,158)) SITES FOR THE INDUSTRY’S PRODUCTION FACILITIES

Human >> ZMZ Industrial Park* resources >> Unutilised sites at GAZ Group The region has longstanding technological traditions and Key enterprises at the GAZ Group’s production sites in the region: well-established training — LLC GAZ Car Factory; systems for skilled personnel — PJSC GAZ; — LLC Pavlovo Bus Plant.

GAZ Group is the leader in Russia when it comes to creating highly effective international partnerships: Volkswagen, Daimler. GAZ Group is the The Group is also involved in the localisation of auto component leading manufacturer of manufacturing together with other leading international companies: commercial vehicles in Bosal, Bulten and Mitsubishi. Russia.

*See the Investment Infrastructure Section. 18 Investor’s Guide #Successstories Automotive industry T production facility atitsown sitewithinvestments ofover RUB 1.5 billion. In 2015 MagnaAutomotive Rus openedamodernized automotive component Novgorod Region. In 2012 thecompany signedaletterofintentwiththeGovernment oftheNizhny Kaluga, andoneinNizhny Novgorod. In 2010 thecompany launchedfour plantsinRussia –two inSaintPetersburg, onein skilled personnel. Novgorod Region was selectedduetoitsproximity tocarmanufacturers andhighly Exteriors &InteriorsacquiredTechnoplast, acompany inNizhny Novgorod. The Nizhny and theadoptionof corresponding decisions. system facilitates theprompt consideration ofrequests from investors communications withthebusinesscommunity. Thesingle-window It shouldbenoted thattheregional authorities have establishedeffective industry. technical school,andalonghistory connected withtheautomotive The region hasastafftraining system for theautomotive industry, a our clientsontime. in theNizhny Novgorod Region,we were ableto perform theorders of operations ofourconsumers–carmanufacturers. After locatingourplant Our production facilities andourbusinessare closelytiedto theassembly interior parts. and to facilitate further growth anddevelopment oftheproduction ofcar its positionasasupplierofpainted exterior parts ontheRussianmarket Magna decidedto implementaproject inNizhny Novgorod to consolidate JSC MagnaAutomotive Rus The company hasbeenworking ontheRussian market since2007. Magna In2008 plants and93engineeringcentresin29countriesworldwide. his company istheleadingglobalsupplierofautomotive componentswith340 Chief OperatingOfficerfor Russia Magna Exteriors Division Magna Exteriors Ilya Smolin 19 The Nizhny Novgorod Region 20 Investor’s Guide Chemical industry tal standardsallinonetown: andareasthat meettherequiredenvironmensonnel, accesstomarkets - The Dzerzhinsk industrialzone isuniqueforcombininghigh-techper Novgorod Region. centre ofthechemicalindustryinNizhny kilometres from Nizhny Novgorod, isthe The town ofDzerzhinsk, located 30 research institutes pharmaceutical industry. facilities, includingthemanufacturingofactivesubstancesfor required forthedevelopmentoffineorganicsynthesisproduction An industrialsitethatmeetsalltheenvironmental standards project institutes). budget-funded openingsininstitutesDzerzhinsk, fiveR&Dand A largepoolofhighlyskilledprofessionals(morethan3,500 Affordable industrialrealestate. located neartheproductionsite). railway stationandthefederalhighway(Gorky М7Volga are duetoitshightransportAccess tosalesmarkets accessibility 5 chemical enterprises Total revenue ofthe region’s RUB 354 billion - 21

Industrial sites and parks, highly skilled staff, and lower industry average salaries compared to the Volga Federal District, make it possible to successfully develop chemical production in the region.

076 TRENDS 13 people Region Novgorod The Nizhny Increase in the depth of refining of oil products.

Number of people Increase in expenditures on innovation-based research and employed in the development of new technologies. industry Increase in domestic demand for mineral fertilizers and polymers. RUB 48,467 Replacement of imported products with Russian analogues.

Average salary in the PROSPECTS industry (less than the industry average in Location of fine organic synthesis production facilities. Volga Federal District (RUB 49,481)) Localisation of the production of pharmaceutical substances, which is also one of the main priorities of the Development Strategy of the Russian pharmaceutical industry to 2030. Human resources The establishment of a fine organic chemical synthesis industry manufacturing products with high added value. State University of Nizhny Novgorod by name of Processing of by-products of the oil refining sector. N.I. Lobachevsky Nizhny Novgorod State SITES FOR THE INDUSTRY’S PRODUCTION FACILITIES* Technical University by name of R.E. Alexeev >> Oka Polymer Industrial Park

The petrochemical >> Perspective Dzerzhinsk Vostochny Industrial Park sector is one of the >> Kstovsky District Industrial Zone key anchors of the region’s economy. >> Dzerzhinsk Industrial Zone

Research institutes

— Research and Design Institute of Urea and Organic Synthesis Production — Polymer Chemistry and Technology Research Institute by name of V.A. Kargin — Chemistry Research Institute of the Nizhny Novgorod State University — Institute of Organometallic Chemistry by name of G.A. Razuvaev — Institute of Chemistry of High-Purity Substances by name of G.G. Devyatyh

*See the Investment Infrastructure Section. 22 14% Other RUB 7% 354 billion NIZHPHARM Breakdown Total revenue of the Investor’s Guide Investor’s of revenue region’s chemical enterprises 79% LUKOIL Nizhegorodnefteorgsintez KEY ENTERPRISES OF THE SECTOR:

Nizhny Novgorod

— Orgkhim Biochemical Holding — JSC NIZHPHARM (Stada)

Dzerzhinsk

— PJSC SIBUR Neftekhim — LLC Sintanol Plant GK Norchem — СJSC Korund-CN — Sintez OKA Group of Companies Nizhny — JSC Orgsyntez Novgorod Dzerzhinsk — OJSC Aviabor

Kstovo

Kstovo

— LLC LUKOIL- Nizhegorodnefte- orgsintez — LLC RusVinyl — PJSC SIBUR Kstovo

One of the priorities of the Nizhny Novgorod state-of-the-art chemical sector for the region’s Region’s investment policy is to attract economy. To this end, the region is creating all cutting-edge high-tech manufacturers of the necessary infrastructure, which will include pharmaceutical substances and innovative fine industrial parks and industrial sites ready to organic synthesis technologies to develop a accommodate chemical production facilities. #Successstories Chemical industry L established attheenterprise Approximately high-performance 500 workplaces withcompetitive salarieshave been industrial safety standards. environmental legislationoftheRussian Federation andinternational environmental and which guaranteesenvironmental andindustrialsafety instrictcompliancewithboththe LLC RusVinyl manufactures itsproductsusingstate-of-the-artEuropeantechnology, This iscurrently theonlymanufacturer ofemulsionPVC inRussia. LLC RusVinyl manufactures suspensionandemulsionpolyvinyl chloride. development ofthecountry, resolvinganimportantimportsubstitution objective. of new petrochemicalsmanufacturing facilities hasapositive impactontheeconomic Russian market withthebestworld practiciesandtechnologies.The establishment and thepulppaperindustry. The implementationoftheprojectallowed toprovide goods, footwear, clothesandsportsequipment,agriculture, thechemicalindustry, industry, themanufacture electricalengineering, offurniture, packingmaterials,consumer traditionally beenraw materialsusedinotherindustries:construction, theautomotive The productsmanufactured by RusVinyl -polyvinyl chlorideandcausticsoda-have tonnesofPVC tonnesofcausticsoda. designed capacityof330,000 and225,000 Putin. Today, LLCRusVinyl isoneoftheleadersinRussia’s polymerindustry, withannual of theproductioncomplex heldinSeptember2014 was attendedby President Vladimir LLC RusVinyl company SIBURandtheEuropeanGroupSolvay. The officialopeningceremony Kstovo DistrictoftheNizhny Novgorod Region, whichwas formed by theRussian LC RusVinyl isaRussian-Belgian jointventure manufacturing polyvinyl chlorideinthe 23 The Nizhny Novgorod Region 24 Orgkhim Biochemical Holding

ounded in the Nizhny Novgorod Region in 2001, over the past few years Orgkhim Investor’s Guide Investor’s FBiochemical Holding has been transformed from a regional plant in the small regional town of Uren into the only manufacturer in Russia and the second largest global manufacturer of safe petrochemical plasticizer oils for car tyres and rubber. The holding is also a global leader in wood chemistry and holds leading positions on the Russian market in the manufacture of a wide range of wood-chemical products.

Today, Orgkhim Biochemical Holding consists of three plants in Russia with their decision-making unit in Nizhny Novgorod, production and service platforms in Perm and Togliatti, and offices in China, Korea, Singapore, Malaysia, Poland and Luxembourg.

Orgkhim Biochemical Holding in figures:

— more than RUB 7 billion – annual turnover of the holding; — 60% of products are shipped for export; — 125,000 tonnes/year of extender oils and 48,000 tonnes/year of wood chemical products, From the outset we were convinced that representing the total output of the holding’s main the Nizhny Novgorod Region was the place plant in Uren; where we had to launch production. We — 40,000 tonnes/year – total joint production in Arkhangelsk Region; always wanted to work here, to develop the — 70,000 tonnes/year – projected output at a plant in innovative potential of our own region, and Malaysia; expand and create new jobs. Innovation- — Won two tenders for new product and technology based development has been a priority for development projects in accordance with our holding for more than 17 years. This is Government Resolution No. 218 of the Russian Federation On State Support Measures for the facilitated by the comfortable investment Development of Cooperation of Russian Academic environment created in this region, and Institutions of Higher Education and Organisations the smooth interaction with international Implementing Integrated Projects for the Establishment of High-Tech Production Facilities; partners from different countries. The — 5 times – Orgkhim was awarded with the Standard Nizhny Novgorod Region also boasts of Honour by the Governor of the Nizhny Novgorod significant industrial potential and highly Region; skilled workers, engineering employees and — 4 times – the holding was awarded a high distinction by the Government of Nizhny Novgorod research staff. Region and the expert community as the Best Exporter of the Year in Russia; Nikolay Khodov — in 2017 the General Director of the Holding Nikolay General Director Khodov was recognised as the Exporter of Orgkhim Biochemical Holding the Year at the annual Person of the Year awards ceremony. Agri culture agricultural products. position intheproduction andprocessing of developing agrarian region holdingleading Today theNizhny Novgorod Regionisa Area ofagricultural land,including: Agricultural land 39% region Land bankofthe 7,662,000 528,000 Grazing 161,000 Haymaking Source: The MinistryofAgriculture andFood Resources oftheNizhny Novgorod Region. 2,992,000 ha ha 407,000 Other 2,992,000 ha ha ha is available for development. of agricultural landandarable land About ha 10% in Volga Federal District. region isoneofthelowest The costoflandinthe Tillable Unsuitable hа 339,000 Suitable hа 200,000 1,357,000 hа Used 1,896,000 ha 25 The Nizhny Novgorod Region 26

RUB 23,7 billion

Total amount of the investment projects to be implemented in the region in 2018-2020, including: Investor’s Guide Investor’s RUB 2 billion RUB Processing 1.4 billion Crop growing

RUB RUB 4.5 billion Breakdown 10.8 billion Dairy farming by sector Pig farming

RUB 5.0 billion Poultry farming

Source: The Ministry of Agriculture and Food Resources of the Nizhny Novgorod Region.

AGRICULTURAL PRODUCTS IN 2017:

1 324,000 tonnes 351,800 tonnes 17.4% –3.0% Grain crops Vegetables

894,100 tonnes 2,300 tonnes Potatoes 1.3% Flax fibre 1.5%

602,000 tonnes 308,300 tonnes Milk 0.6% Sugar beet 56.3%

tonnes million 142,900 1,366.2 eggs Cattle and poultry –5.7% Eggs 0.3% 27

rd th 3 in overall food production 5 in overall production of poultry in VFD in VFD and milk The Nizhny Novgorod Region Novgorod The Nizhny rd th 3 in planted area of potatoes 8 In grain crop acreage in VFD in VFD

RUB The current level of agricultural production enables the region to be 18,416 completely self-sufficient for such agricultural products as grain crops, potatoes, and also poultry farm products. Average salary in the industry (higher than THE SHARE OF IMPORTED PRODUCTS AND PRODUCTS FROM the industry average in Volga Federal OTHER REGIONS IN NIZHNY NOVGOROD REGION District (RUB 17,226)) 10% 30% Vegetables Milk 55% 62% Meat Fruit and berries

GK Russkoye 29% 28% Pole Other RUB Breakdown 17billion of revenues 11% Total revenue of LLC NNPP top 13 companies 18% in 2016 JSC Seymovskaya Poultry 14% Farming Plant LLC Chernyshikha Meat Processing Plant

Source: The Ministry of Agriculture and Food Resources of the Nizhny Novgorod Region. 28 Investor’s Guide Investor’s

TRENDS Satisfaction of demand on the domestic market in niches with In addition to import a high share of imports. substitution, a change Stimulation of demand for new products on the domestic in consumer preferences market. also incentivises the appearance of new Entry into foreign markets. products. Hard cheeses, Opportunities to increase the rate of return through an for example, have increase in production efficiency and the manufacturing of significant potential high added-value products. from this perspective.

PROSPECTS

Creation of advanced processing facilities of agricultural products.

Development of breeding.

000 Organisation of effective product sales channels: 85 people — Cooperation between local agricultural producers; — Creation of a network of modern specialised storage Number of people facilities; employed in the — Creation of a network of wholesale distribution centres; industry — Establishment of mutually beneficial relations between producers and retail chains.

Stabilisation of retail prices. #Successstories Agriculture A AFG National Group —  tonnesor90%ofannualcarrot productionintheregion; — 20,000 — 5productionsitesinfive districts; — 15,400 haofland; Currently AFGNationalinNizhny Novgorod is: seed-growing company received elitestatus. to increaseproductivityandquality. Production ofseedpotatoeswas organisedandthe tonnesinDalneeKonstantinovo6,000 haoflandisirrigated district.Morethan3,500 district, carrot storagefor district,potatoseedstoragefor 18,500 tonnesinShatky tonneswere built:potatostorageforcapacity of40,000 16,400 tonnesinLukoyanovsk modern technologies.The following refrigeratedandventilated warehouses withatotal The vegetable productionoftheNizhny Novgorod Region hasreachedanew level dueto federal distributingfacilities. Productsof potatoesandcarrots inconsumerpackaging. aresoldthroughthelargest Full cycle productionincludescultivation ofvegetables; watering, washing andpacking billion over threeyears. annualy.. tonnesoftablepotatoesand15,000 tonnesofseedpotatoes more than40,000 vegetables intheNizhny Novgorod Region. The holdinginvested morethanRUB 3 market leadersinpacked cereals,startedcultivation ofpotatoesandopenground griholding AFGNational,alreadythelargestRussian riceproducerandoneof Novgorod Regionasawhole. the development oftheNizhny sectors ofeconomy, butalso for of theagribusiness andother not onlyfor thedevelopment This isextremely important less inputfrom theinvestor. more efficientlyandwill require projects willbeimplemented even and interesting investment Corporation, any undertakings establishment oftheDevelopment convinced thatafter the regional government. We are partnership relations withthe time, we have establishedgood for several years. During this Nizhny Novgorod Region We have beenworking inthe Director, LLCAFGNational NN Valery Maslanov 29 The Nizhny Novgorod Region 30 LLC Rassvet

assvet Farming Company specialises in industrial production of fresh berries: Investor’s Guide Investor’s Rcommon garden strawberries, blueberries, raspberries, blackberries, and honeyberries. The enterprise is unique in the Nizhny Novgorod Region and in Russia as a whole in terms of area, output and the diversity of the berries on offer. The berry fields of LLC Rassvet, located in Sergachsky District, the Nizhny Novgorod Region, cover an area of 100 hectares. There are plans to expand the area of berry fields to 300 hectares with an increase of the annual harvest to 700 tonnes, which would represent one-tenth of the total commercial production of berries in Russia.

LLC Nizhny Novgorod Hemp Fibre

izhny Novgorod Hemp Fibre specialises in growing and processing commercial hemp fibres. The land cultivated Nfor the crop and production facilities are located in the Pilninsky District, Nizhny Novgorod. This is the first industrial project in Russia to create cottonised fibre from hemp. To manufacture the end product, they use as raw materials the best varieties of androgynous cultured hemp for verdure, which are included in the State Register of Plant Varieties of the Russian Federation. Thanks to automatic modular equipment from Laroche, five tonnes of commercial hemp straw (stock) can be processed per hour virtually dust-free, resulting in production with minimal losses of hemp hurds (shives) and fine hemp fibre - hemp with 2 or 3% of sprits. The fine fibre is subsequently processed using unique domestic shock wave technology to produce cottonised fibre - hemp with less than 1% of sprits. Hemp, the strongest plant fibre in the world, is used to manufacture construction, composite and bandaging materials, paper, ropes, textiles, and cotton wool. 31 LLC NNPP Subsidiary of Norwegian Russia Baltic Pork Invest (RBPI)

n 2016, the first pig farm of RBPI Group was launched in Vadsky District, Nizhny Novgorod Region, with the amount of investment exceeding 3 bln rubles. This top-priority investment project uses government Region Novgorod The Nizhny Isubsidies to cover engineering infrastructure expenses. The project has created over 100 jobs and resulted in significant payments to the state promoting the development of Vadsky District. In February 2016 an agreement was signed with the Government of Nizhny Novgorod Region on the construction of a second pig farm in Bolshemurashkinsky District, Nizhny Novgorod Region. Total investments exceed RUB 3 billion. The capacity of the new facility will exceed 19,000 tons of pork per year, with total production of 180,000 pigs per year. The farm will be put into operation by the end of 2018. The pig farm uses state-of-the-art European processes and premium pig breeds. As soon the second farm begins operating at full capacity, Nizhny Novgorod Region will be self-sufficient in top quality domestic pork. Given the investment prospects of the region, the investor and the Government of Nizhny Novgorod Region signed an agreement on the construction of the third and fourth pig farms with a capacity of 180,000 pigs each in February 2018. A site is currently being selected for the development. There are plans to invest over 3 billion rubles in this project. It will also lead to new jobs. The investor intends to apply pig-breeding technologies in line with global standards and also ensure the highest level of zoosanitary conditions. The construction of new pig farms will enable the region to export pork to other Russian regions. The regional government is holding discussions with the investor on the possible construction of a processing facility to make sausages and other meat products. 32

The unique location of the Nizhny Novgorod Region on the banks of the Volga and Oka Rivers opens up extensive shipbuilding opportunities and makes it possible to deliver vessels to the Azov, Caspian, Black, Baltic, and White Seas. Investor’s Guide Investor’s A shipbuilding cluster already exists in the Nizhny Novgorod Region. We are interested in continuing its development. The Development Programme of United Shipbuilding Corporation stipulates the manufacturing of both finished products and components. The only issue now is where these production facilities will be located. I will do all I can to ensure that they end up in the Nizhny Novgorod Region. Gleb Nikitin Head of the Nizhny Novgorod Region Chairman of the Government 23% 38% RUB Other Krasnoye Sormovo 17.5 billion Revenue Factory distribution Total revenue in 2016 structure 17% Volga Shipyard JSC Okskaya 22% Shipyard Russia’s largest shipbuilding companies work

Ship building in the Nizhny Novgorod Region. 33

The Nizhny Novgorod Region is one of the largest industrial 60–80% centres in the Russian Federation with vast shipbuilding potential. At present, shipbuilders in the Nizhny Novgorod Region manufacture a wide range of civilian vessels and a fleet of Share of imported auxiliary ships for the Russian Navy. components The high uploading of local shipyards, coupled with the import substitution policy in respect of expensive import components, Region Novgorod The Nizhny opens up opportunities for the development of the joint and independent manufacturing of components.

SUPPORT The high cost of import components The region is currently developing and the volatility additional mechanisms to support the of the RUB/USD shipbuilding industry, including the potential establishment of a special exchange rate have an economic industrial production zone for adverse impact on the shipbuilding enterprises. profitability indicators of shipbuilding companies, A federal law in support of the shipbuilding industry which vary from -5% to stipulates incentives on corporate property tax and land tax for a period of 10 years, and also introduces a zero rate 26%. of VAT and customs duties on the equipment needed to upgrade the shipyards.

THE SHIPBUILDING INDUSTRY TRENDS CONSISTS OF: Localisation of the manufacturing of components. organisations and enterprises, Increase in the share of civilian shipbuilding. 17 including: Development of shipbuilding for the fisheries sector. design 4 bureaus; Import substitution and increase in the share of domestic materials and components in shipbuilding. shipbuilding and ship 13 repair enterprises. PROSPECTS

Manufacturing of components for shipbuilding (main engines and diesel generators, steering propellers and bow thrusters, RUB 30,848 shipboard cranes and lifting gear, deck equipment). Construction of fishing vessels. Average salary in the industry (lower than Construction of river-sea transport and passenger vessels. the industry average in Volga Federal District Export of civilian products. (RUB 31,311)) 34 Investor’s Guide Investor’s >1,000 HUMAN RESOURCES Volga State University of Water Transport (VSUWT) is the graduates per year largest educational institution focusing on the sector in Volga- Vyatka Region, consists of: four branches, five specialised secondary schools, a training, retraining and continuing education centre for executive staff and specialists in the area STABLE ORDER BOOK IN 2017: of water transport, and a research sector.

Krasnoye Sormovo 100% Factory STABLE ORDER BOOK

Volga Shipyard In 2017, after the state support quotas were allocated for fishing 100% fleet renewal, Okskaya Shipyard concluded a contract on the construction of a series of six fresh fish trawlers (Project 100% ZNT Yard СРТР38М). In 2017 this enterprise also concluded contracts on the construction of ten non-self propelled barges (Project ROB20), 95% Sokolskaya Shipyard and eight dry cargo ships (Project RSD32M). Timber industry region’s totalarea) forest land(49%ofthe Total area ofdesignated reserves offorest land: Nizhny Novgorod Regionhassubstantial 3.8 in Russia 3 rd 63.4% million ha a 15%share of newsprint, with in theproduction forests Commercial species, birches, andaspen predominately coniferous timber intheregion’s forests, Total standingvolume of 564.9 million m³ 35 The Nizhny Novgorod Region 36

Today trends toward the resumption of growth in demand and an increase in the prices of the prod- ucts of the timber industry are being seen on the Russian market. The annual volume of unused softwood timber in the Nizhny Novgorod Region equals 2 million m3, which is a significant resource for further development of the industry and the possible organization of local production, including the production of oriented strand boards and chipboards.

PRICES OF RAW WOOD: Investor’s Guide Investor’s

Price, Price, Types of raw wood RUB/m3, Types of raw wood RUB/m3, net of VAT net of VAT Spruce pulpwood (2 to 4 species) 1,300 Coniferous pulpwood (1 to 3 species) 310 Pinewood pulpwood (1 to 3 species) 700 Coniferous process feedstock 160 Birch pulpwood (1 to 3 species) 600 Coniferous saw timber (1 or 2 species) 160 Aspin pulpwood (1 to 3 species) 330 Birch veneer blocks (1 or 2 species) 150

The Russian Federation accounts for a larger share of global production of low added-value products (round wood and sawn wood) than advanced wood processing products (only 2% of the production of wood panels and pulp and paper production).

BREAKDOWN OF FORESTED TRENDS AREA BY MAJOR GROUPS OF SPECIES: Increase in wood processing depth and integrated wood utilization.

Localisation of industries producing sanitary tissue products.

Increase in demand for Russian-made furniture. 1,702,000 ha Soft-wooded broadleaf (birch, aspen, lime, KEY ENTERPRISES alder, willow) — JSC Volga — LLC Uta — LLC FK Nordplit — LLC Stora Enso Packaging — LLC Slavic Furniture Company — LLC Hygiene Technologies 1,700,000 ha — LLC Unilin — OJSC Bumsnab Coniferous (pine, fir, — GK ROS — LLC Nizhkarton larch) — LLC Silva

PROSPECTS

RUB 1 Establishment of new production facilities using and processing 18,204 low-grade wood and wood raw materials.

Average salary in the 2 Production of medium-density fibreboards (MDF) and industry (higher than high-density fibreboards (HDF). the industry average in 3 Production of oriented strand boards (OSB). Volga Federal District (RUB 17,222)) 4 Production of plywood and cardboard.

5 Production of furniture. #Successstories Timber Industry U currently employs people. morethan200 present thefactory produces30different laminatecollections.The factory output oftheretrofitted factory equals 10 millionm2oflaminateper year. At were built,andlaminateproducingcapacitieswere increased.The maximum During projectimplementation,thefactory was refurbished, new storagefacilities 2016 toexpand thefactory withinvestments ofEUR24million. more proactively toconsumerneedsintheRussian Federation, itwas decidedin To increaseproduction capacity, producenew typesofproducts,andtorespond factory’s current configuration. to 5.3millionm3in2017. This representsthemaximumcapacitybasedon Since itsopeningthefactory hasincreasedoutputfrom2.3millionm3in2012 (the Nizhny Novgorod Region), investing EUR50million. In June 2012 Unilinopenedafactory producinglaminatedflooringsinDzerzhinsk solid carpet flooring, wood, laminate,ceramictiles,andvinyl coatings. Mohawk Industriesistheleadingmanufacturer offlooringintheUSA, producing UnilinhasbeenapartoftheAmerican corporationMohawkSince 2005 Industries. —  —  —  LLC Unilin production ofheatinsulationblocks. panel production; flooring (Quick-Step, Pergo, Balterio laminateandparquet); divisions: has 21manufacturing sitesinanumberofcountries,andconsiststhree nilin operatesinseveral areasofthewoodworking business.The Group 37 The Nizhny Novgorod Region 38 Investor’s Guide Transport infrastructure * Source:Nizhny Novgorod Region Budget2018. corridors. of Russia’s transport at thecrossroads Nizhny Novgorod — delivery timebyupto55%. Novorossiysk, andSaint Petersburg) willfallonaverageby25%andthe of deliveringa40-footcontainertothemainRussian hubs(Vladivostok, In thelongerterm,thankstoterminalandlogisticscentrecost hubs inRussia. Nizhnywill make Novgorod oneofthe largesttransport andlogistics logistics centreandtheMoscow-Kazan high-speedrailway line(762 km) The region’s geographiclocation,theconstructionofaterminaland System oftheNizhny Novgorod Region”.* the programme “Development ofthe Transport authorities planto allocate RUB42billionfor in theperiod from 2018 to 2020theregional increase accessto salesmarkets. Consequently, Nizhny Novgorod Regionmake itpossibleto and theexpansionofinfrastructure ofthe The development ofatransport logisticssystem Berlin Warsaw RUB Brest Minsk 42 42 Smolensk billion Makhachkala Baku Helsinki Moscow Volgograd Astrakhan Saint Petersburg Saratov Nizhny Novgorod Ekaterinburg Tyumen Omsk 39 Road transport

PUBLIC ROADS AND FREIGHT TURNOVER IN NIZHNY NOVGOROD REGION Over 5 years, Region Novgorod The Nizhny 22,316 22,211 22,185

+891 km 22,052 The increase in the length of public roads with a hard surface. 2,885 2,872 2,430 2,547 2,398 21,425

+18%

Increase in freight turnover

in the Nizhny Novgorod 2012 2013 2014 2015 2016 Region, while total Length of public roads, km Freight turnover, million tonne-km freight turnover in Russia contracted by 6%. Source: Federal State Statistics Service.

National highways passing through the Region: M-7 Volga, R-158 Nizhny Novgorod – Saratov, R-159 Nizhny Novgorod – Kirov – Yaransk. 40

Pizhma Vetluga Shaigino Shakhunya

Investor’s Guide Investor’s Water transport Severny Uren

Access to seas Vetluzhsky 5 Krasnye Baki

Caspian, Black, Azov, Voskresenskoye Baltic and White Sea Semenov Gorodets The Volga (the largest river in Europe) and Oka, which run Zavolzhye through the Region, occupy a central place in the system of Russia’s waterways. Bol. Kozino Bor Dzerzhinsk Nizhny Novgorod

in Volga Region for Russia Kstovo 14.5% 5.5% Bogorodsk Lyskovo Pavlovo Share of the river transport market in 2016

Sergach

Arzamas Kulebaky Vyksa Lukyanov

Diveevo Boldino Sarov Uzhovka 41

Pizhma Vetluga Shaigino Shakhunya Rail transport

Severny Region Novgorod The Nizhny Uren

Vetluzhsky km Krasnye Baki 1,800

Length of the railways at the beginning of 2017 Voskresenskoye Semenov Gorodets hours Zavolzhye <4 16 million tonnes Bor Bol. Kozino to Moscow Dzerzhinsk Nizhny Novgorod Total freight carried in 2016 (4% more than last year) hours Kstovo 8 Bogorodsk Lyskovo to Saint Petersburg Construction of the high-speed Moscow-Kazan railway line will start Pavlovo soon. Trains will operate at a maximum speed of up to 360 km/hour. A non-stop journey from Moscow to Nizhny Novgorod will take 1.5 hours. Sergach

Arzamas Kulebaky Vyksa Lukyanov

Boldino Air travel Diveevo Sarov Uzhovka Nizhny Novgorod’s Strigino International Airport is the main alternate airport to the Moscow air hub.

In 2017, Strigino Airport worked 27,800 m2 with to airlines destinations Area of the terminal 35 47

million people people 1.5 year 966,000 Throughput capacity Total passenger traffic in 2017 (up 24% on the previous year) 42 Doskino Terminal and Logistics Centre Investor’s Guide Investor’s The construction of Doskino Terminal and Logistics Centre will make Nizhny Novgorod one of the largest transport and logistics hubs in Russia. The transport and logistics centre will connect the railway ports of Saint Petersburg, Krasnodar Region, and Primorye Region, with the railway line, Strigino International Airport, and the Nizhny Novgorod River Port.

KEY SYSTEM SOLUTIONS

Regular intermodal freight train service.

Integrated customs infrastructure.

Distribution capacities.

Favourable location compared to industrial zones.

ADVANTAGES

The only terminal in the region capable of accepting a container or piggyback train that is 71 railcars (1,050 m) long, without uncoupling them.

The only terminal in the region capable of performing cargo handling operations for semitrailers and other motor vehicles (piggy-back transportation).

An effective cargo transshipment system from rail to road transport and vice-versa.

Regular intermodal freight train service with seaports of the Baltic Sea, Primorye, Azov and Black Sea basin, the Siberian transport and logistics centre, the Urals, Central Russia, and Chinese provinces, thereby making it possible to optimize logistics costs and supply chains.

Multimodal storage compound.

Substantial decrease in cargo delivery costs and increase in the speed of delivery.

COMPARATIVE COST (RUB) AND TRANSIT TIME (DAYS) OF THE DELIVERY OF 40-FOOT CONTAINERS TO THE MAIN HUBS BY RAIL

Currently (2018), In the long term, Routes Saving RUB/days RUB/days

Vladivostok – Nizhny Novgorod 104,330 / 22 93,079 / 12 11% / 50% Novorossiysk – Nizhny Novgorod 40,357 / 11 29,136 / 5 28% / 55% Saint Petersburg – Nizhny Novgorod 30,177 / 10 19,186 / 5 36% / 50% Information Technologies is anattractive optionfor ITsolutions. Saint Petersburg –theNizhny Novgorod Region information technology centres –Moscow and cost ofsoftware development compared to the functions to theregion, andthecompetitive companies’ successintransferring part oftheir infrastructure (ITParks), international Due to theavailability oftrained specialists, in Russia 4 th in software exports 43 The Nizhny Novgorod Region 44

The cost of software development in the Nizhny Novgorod Region is one competitive advantage in the IT sector.

AVERAGE SALARY IN THE SECTOR (in RUB) Investor’s Guide Investor’s 99,287 77,553 48,726 Moscow Saint Petersburg Nizhny Novgorod

Source: Federal State Statistics Service. iCluster

The decision to set up an iCluster was made at the 10th international forum of information technologies ITFORUM 2020/Digital World in 2017. The iCluster represents the symbiosis of research centres and industrial enterprises that will enable the region to attract new investments and increase the competitive advantages of cluster participants.

MAJOR SOFTWARE DEVELOPERS IN NIZHNY NOVGOROD

Company name Core business Headcount

Development of customised software for telecommunications, automotive, retail, MERA 1,300 medical, energy and other companies Development of tools for developers in the areas of computer vision and machine Intel 700 learning, multimedia and IoT HARMAN Development of built-in automotive systems, IoT and mobile devices 600 Development of information security systems, traffic filtering and legal control MFI Soft 330 systems and anti-fraud systems Development of OSS/BSS and SDN/NFV solutions for telecommunications service NetCracker 310 providers Tecom Development of radio broadcasting and telecommunications software 160

Development of applied and systems software for high-tech, medical, and auto- Auriga 160 motive companies

Seldon Development of information analysis systems 150 Five9 Development of cloud call centres (SaaS) 130 Transset Development of ERP, OSS and CMMS solutions 130 Development of customised software in information systems for enterprises and Artezio 85 web development Sberbank Development of banking software 80 Technologies 45

Nizhny Novgorod has already successfully created technological parks.

Ankudinovka IT Park Region Novgorod The Nizhny

The technopark’s infrastructure stipulates facilities for work and 30 comfortable accommodation: research laboratories, office centres with parking lots, banks, a hotel, residential complex, shopping Residents in the centre, kindergarten, polyclinic, etc. technopark Companies granted resident status are entitled to lease office space at a preferential rate of 60% of the office’s market price, and are also eligible for free educational courses, legal and accounting advice, 616 as well as project support and assistance in finding sources of Jobs created during financing. 2016 and 2017 INDUSTRY SPECIALISATION OF THE TECHNOPARK Products worth

RUB Information and communication Electronics engineering technologies 2.7 billion have been produced Instrument-making Chemical and biomedical industry technologies RUB 234 million Machine building Development of new materials Investments attracted Sarov Technopark

Sarov Technopark is a public-private technopark set up to create and market innovative global and national technologies based on the 44 competencies of the Federal State Unitary Enterprise Russian Federal Residents in the Nuclear Centre All-Russian Research Institute of Experimental Physics, AFK Sistema, RUSNANO Fund for Infrastructure and Educational technopark Programmes, and other high-tech companies. The technopark’s infrastructure includes office space and parking lots, a research and technology centre, research and production blocks, a laboratory block, business incubator, hotel and townhouses for 668 comfortable living. Jobs created INDUSTRY SPECIALIZATION OF THE TECHNOPARK

Information Technologies Materials and coatings Products worth

RUB Energy-efficient technologies Biomedicine 1.39 billion have been produced Sensors and automation 46 Investor’s Guide Education NetCracker, Sberbank, SIBURHolding,MERA, andothers. the trainingand retrainingofspecialists, including:Intel,LG,HARMAN, NVIDIA, cooperating closelywith higher educationinstitutionsplayanimportant role in Major Russian andinternationalcompanies operatingintheregionand schools Secondary vocational and science Students will enablebusinessto secure qualifiedstaff rapidly. significant share ofthepopulationthatisunemployed The highlevel ofeducationcombinedwiththe MANUFACTURING, TRADE,ANDBUSINESS THE HIGHERANDSECONDARY VOCATIONAL EDUCATION INTHEREGIONISFOCUSEDON higher educationinstitutions graduate annuallyfrom 600 Higher education Processing >80 industries 3,469 7,245 Science Candidates in >50,000 Trade and business

Secondary vocational education 1,808 3,776 provided Services Doctors ofScience annually qualifyas 30 28 1,797 3,752 students Postgraduate communications centres Innovative resource Source: Federal StateStatisticsService. Transport and 11 of education Higher institutions 1,074 2,242

Other 3,153 6,584 47

The high level of education combined with the The Nizhny Novgorod Region is one of the most attractive engineering significant share of the population that is unemployed regions in Russia and boasts extensive experience of the development will enable business to secure qualified staff rapidly. and deployment of innovations.

THE SHARE OF HIGH-TECH PRODUCTS IN THE TOTAL VOLUME OF MANUFACTURED GOODS IN MONETARY TERMS The Nizhny Novgorod Region Novgorod The Nizhny

8% 20% 17% 16% 11% 8% 6% 3%

Average Tula Republic of Tver Tyumen for Russia Republic of Nizhny Novgorod Moscow Region Bashkortostan Region Region Tatarstan Region Region Source: Federal State Statistics Service. 6 DEVELOPED STATE-OF-THE-ART MANUFACTURING TECHNOLOGIES Moscow national research 206 Saint Petersburg and development 153 centres Chelyabinsk Region 121 Moscow Region 109 th Sverdlovsk Region 7 and 99 300 40,000 in Russia Republic of Tatarstan organisations people 64 Nizhny Novgorod Region are involved in research 61 Source: Federal State Statistics Service. and development STATE-OF-THE-ART MANUFACTURING TECHNOLOGIES BEING USED Moscow 18,800 Moscow Region innovative 16,532 60 technologies Nizhny Novgorod Region 10,722 developed by regional Sverdlovsk Region scientists are introduced 10,379 rd into production annually Bashkortostan 9,324 3 Saint Petersburg 9,026 in Russia Tyumen Region 7,680 Source: Federal State Statistics Service.

The large number of R&D projects and their high level of conversion 2,200 patents into improvements at production facilities results in rapid growth in the region’s technological infrastructure. In future, this potential were issued from 2013 to will help to create production facilities with high added value. The proximity to other high-tech industries will enable enterprises to 2016, of which 60% were not promptly cover their requirements for components. A large number technological inventions. of R&D organisations will make it possible to retain this trend for the long term. 48

The current network of both public and private infrastructure facilities ensures the region’s high investment appeal, as it enables an investor to promptly select a site that is tailor-made for the project – from a startup to a large industrial

Investor’s Guide Investor’s enterprise.

Industrial parks with all the necessary under 6 infrastructure in place +1 construction

8 2 +261 and 126 business technology Greenfield Brownfield incubators parks

Sites for industry Sites for industries more 251 (Greenfield + 76 than 5 hectares (135+116) Brownfield) (59+17) (Greenfield + Brownfield)

Source: Interactive investment map of Nizhny Novgorod Region.

INDUSTRIAL PARKS OF NIZHNY NOVGOROD REGION:

5

Zavolzhye 6 Balakhna 3,4 2 1 Bor Dzerzhinsk Nizhny Novgorod infrastructure

1 Almaz-Antey 4 Bor Municipal Park

2 Oka Polymer 5 ZMZ

3 Bor Industrial Park 6 Real Invest Investment Investment 49 Almaz-Antey Oka Polymer

Nizhny Novgorod Dzerzhinsk The Nizhny Novgorod Region Novgorod The Nizhny INFRASTRUCTURE: INFRASTRUCTURE:

Area: Area: Greenfield: 60 ha, Brownfield: 100,0002 m Greenfield: 150 ha, Brownfield: 45,0002 m

Water: up to 3,600 m3/day Water: 25,000 m3/hr.

Electric power: up to 20MW Electric power: 115MW

Natural gas: up to 5,000 m3/hr. Natural gas: 17,000 m3/hr.

Hard surface roads Hard surface roads: 29 km

Promyshlennaya railway station: Access to Kostarikha railway station 200 railcars per day

Real Invest 50 Bor Industrial Park Bor Investor’s Guide Investor’s

INFRASTRUCTURE:

Area: Greenfield: 10 ha, Brownfield: 13,000 m2 (production premises)

Water: 3,120 m3/day

Electric power: 0.9MW

Natural gas: 16,550 m3/hr.

Railway spur: on the site

Bor Municipal Park

Bor

INFRASTRUCTURE:

Area: Greenfield: 30ha

Water: 3,120 m3/day, which can be increased

Electric energy: 10MW, which can be increased

Natural gas: 10,000 m3/hour, which can be increased

Railway spur: on the border of the field 51 ZMZ Zavolzhye

The industrial park was created at Zavolzhye Engine Factory and specializes in the location of Region Novgorod The Nizhny production facilities manufacturing automotive components and equipment.

INFRASTRUCTURE:

Area: Greenfield: 8.4ha , Brownfield: 110,000 м2

Water: 1,320 m3/day

Electric power: 8.3MW

Natural gas: 2,085 m3/hr.

Real Invest

Nizhny Novgorod

INFRASTRUCTURE:

Area: Greenfield: 165ha

Water: 1,440 m3/hr.

Electric power: 23MW

Natural gas: 10,000 m3/hr. 52 Investor’s Guide Business support KEY TAX ANDFINANCIALINVESTOR SUPPORT MEASURES measures R&D costs Subsidies to compensate expenses onloaninterest Subsidies to compensate Project (taxincentives) Regional Investment support measures) Contract (taxandfinancial Special Investment Priority Investment Project Type ofmeasure/concession of supplies) issue ofpilotbatches costs (leasing,R&D, Subsidising investor projects) (for infrastructure concession agreement partnership/ Public private projects (RIP) Regional investment projects (PIP) Priority investment Chemical industry Shipbuilding exemptions from Tax concessions Reduced rates/ taxes/statutory measures Financial support payments Agriculture Automotive to SMEs Preferential lending loan interest Subsidising costson in Sarov Development (TSED) Socio-Economic Territory of contracts (SIC) Special investment industry Forestry 53 Priority Investment Project (PIP) in the Nizhny Novgorod Region

ELIGIBILITY CRITERIA:

Amount of RUB OR Project implementation in a subsidized municipal Region Novgorod The Nizhny investment 100 million district (subsidies of more than 5%).

Conclusion of an investment agreement with the Nizhny Novgorod Region by tender (approval of the investment plan, form of state support, rights, obligations, and liability of the parties).

To conclude an investment agreement, the investor must develop an investment plan and the business plan of the project according to the form approved by regional law.

INCOME TAX PROPERTY TAX Reduced rates Exemption from the tax to the regional budget on newly created/purchased property up to 12.5% Tax incentives Reduced to 0.55% on upgraded property.

LEASE OF LAND Reduction/exemption from LAND TAX lease payments for land owned by the state/municipality Exemption

Effective period of the tax concessions 5+2 years, but not to exceed the payback period of the PIP. — Amount of the tax concessions ≤ amount of investment. — Guaranteed stability of regional statutory regulation and no increase in the tax burden for the effective period of the PIP.

NON-TAX SUPPORT MEASURES FOR PIP:

1. Subsidies to compensate interest expenses on a loan. 2. Subsidies to compensate the costs on the creation of infrastructure facilities/connection to utility networks. 3. Guarantees of Nizhny Novgorod Region/receipt of a tax credit for regional taxes.

RECIPIENT: ISSUER: Legal entities involved in investment activities and implementing PIP Nizhny Novgorod Regional Government (without any restrictions on the line of business) and Legislative Assembly 54

Special Investment Contract (SIC)

ELIGIBILITY CRITERIA: Investor’s Guide Investor’s Amount of RUB investment 750 million

The share of income from the sale of goods produced under a SIC represents at least 90% of the total.

Activities must be associated with the creation or upgrade of a production facility and/or the manufacturing of industrial products that have no analogues in the Russian Federation (it is anticipated that the list will be expanded in accordance with the draft law on SIC 2.0).

INCOME TAX PROPERTY TAX Reduced rates Exemption payable to the regional and federal budgets up to 0% Tax incentives

ACCELERATED DEPRECIATION LEASE PAYMENTS of property, plant, and equipment Reduced lease payments for the land manufactured under the SIC owned by the state/municipality (with a ratio of ≤ 2)

Additional guarantees: — Guarantee that the aggregate tax burden will not be increased after the conclusion of the special investment contract. — Opportunity to obtain confirmation that the industrial products have been manufactured in the Russian Federation in order to gain access to the public procurement market. — Simplified procedure for participation in public procurement opportunity to be a supplier of products manufactured under a SIC on a sole-source basis) provided that RUB the amount of investments in the project equals at least 3 billion.

RECIPIENT: ISSUER: Legal entities involved in investment activities, which implement SIC The Ministry of Industry, Trade, and Business in certain industries: of the Nizhny Novgorod Region

Mechanical engineering Pharmaceuticals Forestry Shipbuilding

Pulp and paper and Telecommunications Biotechnology Tool-making industry woodworking industry equipment

Metal industry Medical industry Electronic industry Radioelectronics

Chemical industry Light industry Aviation 55

Regional Investment Project (RIP)

Exemption from the payment of income tax to the federal budget.

ELIGIBILITY CRITERIA: Region Novgorod The Nizhny

Amount of RUB for the the concession is granted until 2027 investment 50+million period of 3 years OR Amount of RUB for the the concession is granted until 2029 investment 500+million period of 5 years

The share of income from the sale of goods manufactured under a RIP is at least 90% of total income.

Inclusion in the register of participants of regional investment projects. 56

Territory of Socio-Economic Development (TSED) in Sarov

Investor’s Guide Investor’s ELIGIBILITY CRITERIA: Amount of RUB investment 5 million for 12 months after date of registration in the TSED Register

Registration of a new legal entity in the TSED/no branches or representative offices outside the TSED/ no status of regional investment project.

Compliance with the list of lines of economic activity that may be conducted as a result of the implementation of investment projects.

Conclusion of an agreement on performing activities with the TSED management company, for which purpose the business plan of the project must be developed in the form approved by regional legislation.

INCOME TAX PROPERTY TAX Reduced rate (payable to the regional Exemption budget):

for the first five years after the 5% first profit is received Tax concessions 10% for the next five years

INSURANCE CONTRIBUTIONS LAND TAX Aggregate reduction of the rate Exemption up to 7.6%

RECIPIENT: ISSUER: Legal entities involved in investment activities, which obtained TSED management company the status of a resident of Sarov TSED in the following areas of expertise:

New energy New materials Medical industry

IT Scientific instrument building Food industry

Supercomputing and modelling Mechatronics Furniture industry 57

Public private partnership/ concession Preferential lending to SMEs agreement (PPP/CA) — Loan amount of RUB 5 million — A tool for the implementation of to RUB 4 billion (for one infrastructure projects. project). — Establishment of mixed project funding — Work in priority sectors: sources; individual set of concessions agriculture, manufacturing; for investors during the investment production and distribution phase based on the results of the of electricity, gas and water; Region Novgorod The Nizhny completion of the investment construction, transport and phase of the project. communications, waste collection, processing, and — 12 PPP projects and CA recycling; high-tech projects, with investments of inbound tourism. RUB 7.6 billion have already been implemented. Financial support measures

Subsidising part of the Subsidising investor costs costs related to the — On the payment of lease payment of interest on loans payments on the conclusion of — Organisations within the framework of PIP a financial lease agreement of implementation: in the amount of half the energy-efficient equipment used refinancing rate (key interest rate) of the during the implementation of Central Bank of the Russian Federation. projects after 1 January 2014, but no more than for five years. — Organisations implementing integrated investment projects in priority sectors of — On compensation of part of civilian industry: no more than 70% of costs R&D costs. on rouble loans. — On compensation of costs on — Organisations ensuring the utilities the issue of pilot batches of infrastructure of land plots intended for the production. construction of housing as part of federal special-purpose programmes: no more than the key rate of the Central Bank of the Russian Federation on the date of the agreement, increased by 3 percentage points. — Enterprises in light industry – subject to the existence of an effective business plan based on the decision of the tender committee responsible for selecting priority innovation projects: no more than 70% of costs on rouble loans. 58 Regional non-tax measures to support agribusiness Investor’s Guide Investor’s

REIMBURSEMENT OF PART RESTRUCTURING OF THE DEBTS OF THE COSTS ON INTEREST of agricultural producers to state ON LOANS budgets at all levels and to state Investment credits (up to 10 extra-budgetary funds years) obtained: Write-off of late payment – from 1 January 2009 to 31 interest and penalties, granting December 2015 inclusive — of deferrals and installment of the refinancing Subsidy payments on the loan principal 100% rate of the Central and accrued interest, and write-off Bank of the Russian amounts of the loan principal and Federation; accrued interest. – from 1 January 2016 – Regional budget funds provided of the key interest rate in the amount of the actual 100% of the Central Bank of outstanding arrears on the loan the Russian Federation. principal must be repaid in the Short-term loans (up to 1.5 current year in accordance with years) obtained: the debt repayment schedule approved in the restructuring – from 1 January 2012 to 31 agreements concluded with December 2015 inclusive — creditors. of the refinancing rate of 80% the Central Bank of the REIMBURSEMENT OF COSTS Russian Federation; RELATED ON UTILITIES – from 1 January 2016 – INFRASTRUCTURE/ CONDITIONS: RECONSTRUCTION of the key interest rate – Agreements concluded with 80% of the Central Bank of creditors since 2003 on the the Russian Federation. CONDITIONS: restructuring of debt pursuant to the procedure stipulated – Conclusion of an by the Federal Law on CONDITIONS: investment agreement restructuring. with the Nizhny Novgorod – Targeted use of the – Completion of the selection Region by tender (receipt borrowings by the borrower. process for inclusion as a of PIP status). – Performance by the borrower participant in the rehabilitation of obligations to repay the – Planned amount of PIP programme. principal and pay the accrued investments – at least interest. RUB 2.5 billion. – The amount of the borrowings must not exceed the actual costs.

RECIPIENT: ISSUER: Agribusiness entities The Ministry of Agriculture and of Food resources of the Nizhny Novgorod Region Development Corporation investments intheRegion. the mostfavourable environment possiblefor The maingoal oftheCorporation isto create investment projects intheRegion. a unifiedsupport centre for Development Corporation is Nizhny Novgorod Region 59 The Nizhny Novgorod Region 60

Governor of the Nizhny Investor’s Guide Investor’s Novgorod Region The Ministry of Economic Development

– Developing and monitoring Mitigating risks and the implementation of the creating a favourable region’s socioeconomic development strategy. environment for investors – Developing support measures. at all levels – Developing and improving laws and regulations.

Nizhny Russian Novgorod Region and international The Ministry of Property Development investors – Resolution of land and property Corporation issues. – Structuring PPP/CA projects. – Developing and improving laws and regulations. Investments in the region’s economy

The Ministry of Industry/ OBJECTIVES: Agriculture/ Transport National and Searching for and attracting international investors – Developing industry investors to the region’s strategies. of the region: RDIF, priority economic sectors. – Initiating regional and cluster RVC, RUSNANO, FPR, Assess priority projects from development projects. VEB, FSRN, FNTI, the perspective of economic – Developing and applying SME, World Bank, development prospects and support measures. OECD, etc. budget impact. – Developing and improving laws and regulations. Establish a set of regional – Promote the region’s investment potential. financial and non-financial support measures for the – Include the region’s investor. projects in priority lists. Submit federal concessions for Infrastructure providers – Ensure interaction priority projects. of investors with Provide comprehensive – Issuing technical conditions. development – Ensuring connection to utilities. institutions. support for implementation of projects based on the single- window system. 61 steps from intention to implementation of the 3 project feedback — Expert examination of a business plan — Budgetary impact The Nizhny Novgorod Region Novgorod The Nizhny — Selection of land plot step 1 — Approval of the support package Dedicated INVESTOR institutions — Idea — Approval of connection to utilities — Business Plan — Residency in the investment — Request for a land project plot — Project of the special purpose — Request for utilities vehicle

Land and property Council to the Government of Nizhny Novgorod Land title Nizhny Region step 2 Novgorod Region Project — Project Development — Support — Special Purpose Corporation Priority status Vehicles Development Strategy and Investment Council to the Governor step 3

— Investments — Jobs — Tax proceeds Economy The Nizhny Novgorod Region Development Corporation will of the Region ensure a three-step process to obtain support measures for 1 the investor and start implementing the project in the region.

Before the start of project implementation, the investor will only need to contact the Nizhny Novgorod Region Development 2 Corporation based on the single-window system.

A unified IR and project management centre will make it possible to rapidly establish mutually advantageous 3 relations between the region and the investor.

The Nizhny Novgorod Region Development Corporation will focus primarily on attracting industrial investors 4 planning investments in excess of RUB 100 million. 62 Investor’s Guide Public private partnership TODAY: 12 projects AGREEMENTS PLANNED PROJECTSONTHEBASIS OFPPPANDCONCESSION PROSPECTS SCOPE OFPPPAPPLICABILITY investments amount of RUB Four waste sorting plants Early diseasedetection centre Construction ofaroad and themepark Multifunctional centre includinganoceanarium, hotel, Facility in Russia 8 8 Social servicestothegeneral public Health care Utilities infrastructure decontamination anddisposalofmunicipalsolidwaste. Environmental Infrastructureregardingprocessing,utilisation, Education, culture,sports andtravel. Transport infrastructureandroadtrafficsafety. th billion least RUB12billion. concession agreementswithproposedinvestments ofat implementation ofseven more projects basedon Currently theregionisconsideringpossible central publicwarning systemwas organised. facility; andthereconstructionofaregionalautomated throughout theregion);aweightsanddimensionscontrol cameras violations havebeencreated(morethan1,000 waste disposalsites ; videorecording systemsfortraffic facilities areunderconstruction;two icepalaces,two Six healthandfitness facilities havebeenbuilt;twomore total investments ofapproximately RUB 8billion. implementation of12 PPPprojectsandconcessionswith Currently, developmentofthisareaisensuring the private partnerships (PPP) development ofpublic in thelevel of Transport Travel To bedetermined Over 100 million investments, RUB

3.3 billion Amount of 5 billion 63 The Nizhny Novgorod Region Novgorod The Nizhny

PLANNED PROJECTS ON THE BASIS OF PPP AND CONCESSION AGREEMENTS

Amount of Facility investments, RUB

Multifunctional centre including an oceanarium, hotel, 5 billion and theme park Construction of a road 3.3 billion Early disease detection centre Over 100 million Four waste sorting plants To be determined 64 Investor’s Guide #Comfortable investment appealoftheregion. major businessandculturalevents,increasethe Novgorod, andalsotheimplementationof and richhistoryoftheregion’s capital,Nizhny infrastructure, numeroussightseeingattractions, in theNizhny Novgorod Region. Thedeveloped life andbusinessoperationshavebeencreated All theconditionsrequiredforacomfortable youth theatres. Puppet Theatre), comedyand Theatre, andNizhny Novgorod (Drama, Pushkin StateOperaandBallet They includethreeacademy theatres There areseveraltheatresinNizhny Novgorod. Theatres socio-political andhistoricalcomplex ofthecity. centre andmostancientpart ofNizhny Novgorod. Thisisthemain The Nizhny Novgorod Kremlinisafortress locatedinthehistorical Kremlin environmentmerchant cityofthe17 streets inNizhny Novgorod. Ithaspreservedthespiritof Rozhdestvenskaya Streetisoneoftheoldestandmostbeautiful and cafes. Novgorod withanumber ofarchitecturalmonuments,restaurants Bolshaya Pokrovskaya isthemainpedestrianstreetinNizhny Centre confluence ofthe from thisEmbankment. Volga andtheOka (otherwiseknown asSpit)atthe One canseetheStrelka Square. Nizhne-Volzhskaya Embankmentrunsinparallel. and stretchesfromNizhny Novgorod KremlintoSennaya Volzhskaya Embankmentisinthecity’s historical centre awalkplaces totake throughthecity. Verkhne- The Volga embankmentsaretraditional andOka Embankments th –19 th centuries.

65 Transport

The city’s public transport system includes buses, trams, trolleybuses, fixed-route taxis, metro, rope way and river transport.

Metro Region Novgorod The Nizhny The Nizhny Novgorod metro consists of two lines and 15 stations. The metro network covers five of the eight districts in Nizhny Novgorod.

Rope way Rope way connects Nizhny Novgorod with the satellite town of Bor located on the left bank of the Volga. The Nizhny Novgorod has been listed in the Guinness Book of Records of Europe and Russia for having the largest unsupported overwater span of 861.21 meters. 66 Region Investor’s Guide Investor’s Arts and crafts festivals Svetloyar Lake Golden Khokhloma in the Town of Semenov and The Brotherhood of Folk Craftsmen in the Town Semenov of Gorodets are among the Top 200 events in Russia. Gorodets Bol. Kozino Kerzhenets Nature Reserve Alfa Future People Nizhny Novgorod

Alfa Future People is a festival of electronic music, historically held Vadskoye on an annual basis on the banks Lake of the Volga River on the territory of the former airfield next to the Village of Bolshoye Kozino near Nizhny Novgorod. Ichalkovskiy Reserve In 2017, 50,000 people from 20 countries took part in the event. Diveevo All the infrastructure required to Boldino hold the festival has been created: camp sites, car park, a parking lot for motorbikes and camper vans. In addition, 45 power hookups have been installed and an extensive Wi-Fi network has been deployed in the open air with a coverage of 400,000 m2.

Gorky Fest

Gorky Fest is a modern Russian cinema competition. The programme includes different movie genres: from short films and anthologies to experimental videos and documentaries. The Festival is held at leading venues in Nizhny Novgorod. Guests include Russian cinema stars and special foreign guests. 67

I am convinced that the region is a tourist attraction: Nizhny Novgorod is a convenient venue for holding

federal business forums, has convenient Region Novgorod The Nizhny transport logistics and also boasts Svetloyar Lake a number of cultural attractions. The Nizhny Novgorod Region is already Semenov well-known for such large-scale events as Gorky Fest cinema festival, Alfa Future Gorodets People music festival, and the International Bol. Kozino Kerzhenets scientific and industrial Forum “Great Nature Rivers”. Business activities are having a Reserve positive impact on hotel occupancy levels. Nizhny Therefore, the development of newsworthy Novgorod events in the region and the creation of a positive image among travellers in Russia Vadskoye will be a growth driver. Lake

Dmitry Volodin Investor (Sheraton and Ibis hotels) Ichalkovskiy Reserve Diveevo Boldino Bolshoye Boldino For 300 years, since the end of the 16th century, the ancestors of A.S. Pushkin have owned a family estate in the Village of Bolshoye Boldino. It was here that the poet created several of his Diveevo most famous works. Convent

Every year, several hundred thousand pilgrims visit the Diveevo Convent (otherwise known as the Holy Trinity Saint-Seraphim-Diveevo Monastery). 68 Hotels

The Nizhny Novgorod Region is home to 336 lodgings that have been duly classified, with a total room stock of approximately 10,000 rooms and over 20,000 beds. Two hotels have been awarded

Investor’s Guide Investor’s a five-star rating; 19 hotels have been awarded 4 stars; 63 hotels have earned 3 stars; and 35 hotels were given 2 stars. New hotels of leading international hotel chains were also built in Nizhny Novgorod for the 2018 FIFA World Cup Russia: — Sheraton 5*; — Courtyard by Marriott 4*; — Hampton by Hilton 3*.

Sheraton Nizhny Novgorod Kremlin hotel opened in September 2017. This was the first international five-star hotel in the historical centre of the capital of olgaV Federal District. It is located in Teatralnaya Square in place of the former Moscow Hotel. The Courtyard Hotel of the international hotel chain Marriott, opened in the centre of Nizhny Novgorod, on Ilyinskaya Street in December 2015. This is the first hotel of the international hotel operator Marriott in the region and is intended for the business tourism segment, which implies higher requirements on hotel amenities. 69 The Nizhny Novgorod Region 70 KPMG Globally General information KPMG is a global network of professional firms providing Audit, Advisory, Tax and Legal about KPMG services. The independent member firms of the KPMG network are affiliated Lviv Investor’s Guide Investor’s with KPMG International Minsk St. Petersburg Cooperative (“KPMG Moscow Nizhny Novgorod International”), a Swiss entity. Kiev Kazan Voronezh Perm 27 Rostov-on-Don YEARS IN RUSSIA Ufa Ekaterinburg Yuzhno-Sakhalinsk Krasnoyarsk We operate in Tbilisi Atyrau Yerevan Novosibirsk

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KPMG in Russia  No.1 Audit Firm Leader in Audit KPMG in Russia – KPMG in Russia – Tier 2 in Russia of Leasing Top Rated Tax Top Rated Transfer of the Legal 500 Companiesin Advisory Firm Pricing Firm EMEA rating and the CIS Russia 2009–2017* 2015–2016 2014–2017 2014–2017 2016

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KPMG Fund activities 24 offices The fund supports the development of quality social services for vulnerable children of social and biological risks. KPMG Fund helps expert service NPOs that provide professional support services to children of high social and biological risk or facilitate the development and dissemination of the best social technologies in this sphere. 4 600 Internal projects professionals Our people are actively involved in various projects regularly contributing to the wellbeing of vulnerable children. The firm’s internal projects are also aimed at supporting and developing local communities. Employees regularly donate blood for children, participate in various volunteer projects, pay for services of assisting specialists. Environmental projects Sponsorship Projects aimed at reducing the negative impact on the environment.

OUR FIGURES** KPMG is the official sponsor of the Bolshoi Theatre Volunteer 1,598,600 rub. from 2013 2,071 hours Employees’ donations 25,297,000 rub. Corporate donations

**Data for Russia for the 2017 financial year

© 2018 KPMG. All rights reserved. 71 Our Services Industries AUDIT — Audit of financial statements prepared in accordance with Oil & Gas international financial reporting standards (IFRS, US GAAP) — Audit of financial statements prepared in accordance with Russian accounting principles (RAP) Metals & Mining — Audit Based Services

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© 2018 KPMG. All rights reserved. Contacts

Gleb Nikitin Head of the Nizhny Novgorod Region Kremlin, Block 1, Nizhny Novgorod 603082 T: +7 (831) 419 7433 [email protected] www.government-nnov.ru/governor

Timur Khalitov General Director of JSC Nizhny Novgorod Region Development Corporation 13A Alekseevskaya St., Nizhny Novgorod 603006 T: +7 (831) 469 0360 [email protected]

Andrey Grichuk Head of Volga Regional Center KPMG 117 Maxim Gorky St., Nizhny Novgorod 603006 T: +7 (831) 296 9202 [email protected]

Official investment portal of the Nizhny Novgorod Region www.nn-invest.com

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