SAMARA e-mail: [email protected] www.strommashina.com 2010

ABOUT STROMMASHINA PRODUCTION COMPLEX

CONTENTS

1. LOCATION AND LAND CATEGORY ...... 2 3. PRODUCTION SITE LAYOUT ...... 3 4. PRESENT USE ...... 4 5. RESOURCES AND UTILITIES ...... 6 6. ADDITIONAL INFORMATION ...... 6 7. REGION IN BRIEF ...... 6 8. ABOUT RIVER PORT ...... 9 9. SAMARA – THE REGION'S ADMINISTRATIVE CENTER ...... 12 10. CONTACT INFORMATION ...... 12 APPENDIX 1. MANUFACTURING ENTERPRISE MASTER FILE...... 13 APPENDIX 2. PRODUCTION BUILDINGS AND FACILITIES ...... 17

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1. LOCATION AND LAND CATEGORY

The production complex has an area of 21.9 ha and includes buildings and facilities of an area of 87.8 th.m2. STROMMASHINA production complex is located in the industrial zone at: 10а XXII Parts'ezda Street in the Sovetskiy district of Samara. The production complex is located in the areas classified as "Industrial companies and warehouses" PK1 (hazard class 1, 2) and "Lands of inhabited localities" PK3 (hazard class 5, 6). Distance to residential buildings – 300...1500 meters (depending on the starting point at the site).

By road: the industrial complex is facing XXII Parts'ezda st. and Kabelnaya st. A distance along XXII Parts'ezda st. to the corner of XXII Parts'ezda st. and Zavpdskoye highway is about 500 m. By rail: goods may be delivered and received by rail (at Samarka station of the Kuybyshev Railroad). A contract for the provision and collection of rolling stock is made with VolgaUralTrans OJSC. By river: cargo unloading platforms are about 1.5 km far from the complex on the Samara river.

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2. PRODUCTION SITE LAYOUT

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3. TODAY

History: The plant was founded in 1942. With its newly built workshop being run the plant began production of М-30 machines, water-and-oil heaters and bulkheads. 1945 – since its foundation in 1942 till the end of 1945 the plant was involved in government contracts for the manufacture of metalwork and installation of towers, manufacture and installation of radio masts. In 1946, the plant was handed over to the Ministry of Construction and Road Engineering and renamed to STROMMASHINA Kuybyshevskiy Plant. 1999/2003 – recovery and modernization. 2005 till now – the plant is a contractor of the Federal Service for Defense Order (Gosoboronzakaz) and positioning itself at the forefront of the construction material machinery market (incl. metalwork production/processing machinery) The plant employs 500 people. Core activities: Manufacture of grinding, drying, de-dusting and conveying equipment, special purpose products and metalwork.

Scientific and technical subdivisions: Chief Designer Service (CDS): development, batch monitoring and final adjustment of design documents (DD) of customers; research and development; Chief process engineer service (CPES): development of technology and tooling; development of control programs for CNC lathes; Central Plant Laboratory (CPL) – this is a powerful analytical center with own test base and up-to-date process equipment allowing to conduct comprehensive inspections, tests, incoming and process control of raw material and finished products including by means of NDT.

Production and processing: The plant possesses all kinds of manufacturing technologies in the field of general engineering. Production area: 90,000 sq.m. Hoisting equipment: up to 16 tons.

Equipment mix: 314 metal cutting units of all major types, including, 27 CNC machines, 15 electric welding machines, 2 galvanic units, 18 large-size turning lathes, 2 large-size milling machines.

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Mechanical and assembly: Processing workshops provide high level of accuracy and cleanliness of treated steel surfaces (including stainless steel); sheet-metal stamping, finishing cut and forming are used. The plant has mastered different types of welding and all types of brazing, including: argon arc brazing and controlled-atmosphere brazing. The plant's production capacity allows for monthly production of 300-400 tons of metalwork.

Toolmaking: The plant's workshops produce fixtures and press-forms, stamps, cutting tools and instrumentation.

Quality control: High quality of production is promoted by incoming inspections, quality policy and quality management system. Quality management system is based on ISO 9001, SRPP VT, complies with the requirements of GOST RV 15.002-2003 and certified by a certification authority in the OBORONCERTIFICATE certification system.

At present, the production complex is a machine-building plant manufacturing a wide range of products (equipment for road construction, construction, coal, mining, chemical and oil sectors). Site premises include warehouses and offices.

Please refer to the Appendix for the site master file.

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4. RESOURCES AND UTILITIES 1. Railroad facilities: 11 rail tracks (non-through) of a total length of appr. 3.3 km. 1 diesel locomotive. Unloading/loading platforms equipped with gantry cranes. 2. Power supply: Installed capacity 12 MW, licensed capacity 18.2 MW. Supplier – SamaraEnergo OJSC, grid company – IDGC. 3. Gas supply: Limit – 102,000 m3, commercial – 330,000 m3 . Supplier – Samararegiongaz LLC, grid company –SVGK. Inlet gas pressure –1.2 kg/cm3, working gas pressure – 0.25 kg/cm3. 4. Heat load: Total – 25.5 Gcal. Supplier – branch of Volga TGC. 5. Water supply: Limit – 22,152m3/year. Contract with SamaraVodokanal 1 well.

Existing limits can be allocated for new projects and increased as the need arises. Currently, boiler house and heating system projects are in the pipeline.

5. ADDITIONAL INFORMATION

For more information about the company, please refer to the website at www.strommashina.com

6. REGION IN BRIEF

Samara Oblast is a densely populated region of . The region is regarded for its well- developed industry, construction industry and construction infrastructure.

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Samara Oblast is a federal subject of Russia (an oblast) and a part of the Volga Federal District. The region borders with Saratov, Ulyanovsk and Orenburg Oblasts, the Republic of Tatarstan and Kazakhstan (in a very small part). Governor – Vladimir Vladimirovich Artyakov. The region's administrative center is the city of Samara. Population Population: 3,167.2 thousand people (July 2010). The region ranks 2nd in the Volga region and 12th in Russia. Population density and urbanization: the region is the leader of the Volga region with its 80.3% of urban population. The population of Samara is 1,134 thousand people (as of January 2010). The population of a two-center agglomeration Samara-, including the satellites , , Chapaevsk, is 2.3 million (ranks 3rd in Russia to Moscow and St. Petersburg). Fossil minerals Fuel resources: oil, natural gas, oil shale; a variety of raw construction materials and water resources.

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Samara Oblast is the old oil-producing region with its 2.6% in Russian oil production. More than 380 oil fields were explored and developed. In 2000-2009, average annual oil production amounted to more than 11.0 million tons. In 2009, oil production amounted to 13,170,000. tons, which is 11.5% more than in 2008. A topical issue is the development and implementation of effective ways to increase oil recovery and ensuring the best use of associated gas extracted in the development of oil fields. Mineral construction materials include building stone, brick and tile raw materials, building sand, expanded clay, refractory clay, cement raw material, gypsum, carbonate rocks for production of lime, gypsum and anhydrite, sand and gravel, glass-making sand. Mining and chemical raw materials include phosphorites, native sulfur, rock salt, asphaltites and bitumen, natural bitumen and oil shales. Mining resources include molding sand, bentonite clay and zeolite-containing rocks. Major industries The industry is represented by appr. 400 large and medium-sized companies and more than 4,000 small companies. The most developed industries are mechanical engineering and metalworking, fuel industry, electric power sector, chemical and petrochemical industry, nonferrous metallurgy. Mechanical engineering is represented by an almost full range of basic industries, in which the automotive industry plays a major role. The share of vehicles produced by AvtoVAZ (Tolyatti) is more than 70% of the country's production. The share of main petroleum products such as petrol, diesel and fuel oil is 10-12%. Specialization ratio (per capita production): industrial output 1.9 – ranking 2nd to Yakutia out of all regions of the Russian Federation (excl. autonomous districts); retail turnover –1.6 (ranking 2nd to Moscow). Leading fuel and energy enterprises in the Samara Oblast: Volga HPP (Zhigulevsk) (2300 th.KWh), two large-scale CHP – Novokuybyshevskaya CHP and Tolyattii CHP (250 th.kW each). Agriculture Wheat, millet, sunflower. Cattle is raised both for meat production and milk production.

Investment activity

year Investments in fixed assets, mln. RUB 2005 49,948.7 2006 62,920.2 2007 97,848.4 2008 80,011.7 2009 80,091.8

Cash income (average per capita a month)

year 2002 2003 2004 2005 2006 2007 2008 2009 2010 (January-June) Income (RUB) 4,270 5,788 7,177 9,274 11,390 11,968 13,226 15,291 15,735

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7. ABOUT SAMARA RIVER PORT

Name: Samara River Port OJSC INN (TIN) 6317023569 PSRN 1026301421134 Legal and postal address: 443099 RF, Samara, Spit of the Samara and the Volga Mr. Andrey Dobryanin (General Director)'s reception: Tel.: ( 846) 310-97-96, fax: 310-99-94; Mr. Victor Nazarov (Deputy General Director for Passenger Traffic)'s reception: Tel.: ( 846) 269-62-80; fax: 269-62-51; Email: Samara River Station legal and postal address: 82 Gorkogo st., Samara, 443099, tel/fax 269-62-81; [email protected] Website: http://www.rechport.ru

Name: river port (branch of Samara river port OJSC). Legal and postal address: Syzran river port, Syzran, Samara Oblast, 446001. Mr. Andrey Dobryanin (Director)'s reception: Tel.: (824) 98-32-50; fax: 98-57-82.

Summer cargo navigation: April – November (depending on weather conditions).

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Samara River Port OJSC is the largest transport hub in the Middle Volga region of Russia. Geographical position of the port, which borders with the developed system of railways and highways, allows for economical transport links to the Urals, Siberia, Central Asia, central and northern regions of European Russia. The port is connected with the Volga-Kama and Volga-Don basins, the Baltic, White, Azov, Black, Caspian and Mediterranean Seas. In 2001-2005, main cargo traffic (commercial salt, sulfur, metal scrap, river sand, gravel) stabilized (with small variations from year to year). In 2004, the company opened a new line for metal product transportation from Cherepovets to Rostov-on-Don by tugs. Most of the shipyards supervised by the former Ministry of the River Fleet have ceased production of vessels, and over the last years, the port has been involved in renovation at the shipyards of the Volga basin with tens of millions of roubles being invested into renovation projects annually. Mechanical appliances at the port: - DERRICK crane (1), carrying capacity 100 t. - GANZ gantry crane (1), carrying capacity 16/27.5 t. - GANZ gantry crane (2), carrying capacity 16/27.5 t. - ALBRECHT gantry crane (3), carrying capacity 10 t. - GANZ rear crane (1), carrying capacity 16/27.5 t. - KIROVETZ rear crane (1), carrying capacity 10 t. - ALBATROS rear crane (1), carrying capacity 10/20 t. There is a stationary grain hopper at the quay of the central cargo sector. The hopper is used for loading grain from vessels into railroad cars. The peripheral cargo sector of the port has a concrete quay wall and is equipped with four front and one back Albatros cranes of carrying capacity of 10/20 t. Its open storage areas are currently used for processing bulk cargo and scrap metal. There are 4 railway tracks of total length of 1953 m in the Central Cargo Sector and 1 railway track in the peripheral cargo sector. Four tracks are for open cars, and one track is for covered cars. The rear rail track is equipped with a trench to unload dumpcars and tranship cargo into trucks by a gantry crane. The port has four quay walls of made of precast concrete elements, one of the walls is for passenger vessels: - river station quay wall which is 605 meters long has 6 quays, 3 of them are for transit passenger vessels; - central cargo wall in Samara, which is 419 meters long, has 4 quays; - cargo wall in Samara at the upper pier sector, which is 312 meters long, has 2 quays; - cargo wall in Syzran (branch of Samara river port OJSC), which is 330 meters long, has 3 quays. All quays have a minimum water depth of 3.5 meters. The Samara River Port has 9 open storage facilities of total area of 69,730 m2 and two covered storages 2,500 m2 each. All cargo quays have access tracks and roads. Partners (companies and shippers): - Yum Chermet LLC: ferrous scrap metal recycling and shipment; - Volgaintrans LLC: water/rail/road transport loading and unloading; - Goldengroup LLC: a tenant of storage spaces, construction materials sales; - Zhiguli Lime Plant LLC: a supplier of crushed stone products; - Breg LLC: sand sales and storage; - Volga Shipping Company OJSC: fleet comprehensive services; - Volgotanker OJSC: fleet comprehensive services. Dockage for loading is free of charge, mooring at cargo quay walls is charged as per tariff. There are no stevedoring companies at the port. Pilotage service is not provided.

Samara River Port OJSC price-list 10

No. Service Um Price with VAT Uplifting and hauling down vessels, equipment and RUB/one gross 19,470 RUB 1 machinery by a Derrick gantry crane machine-hour 2 Uplifting and hauling down vessels by gantry cranes RUB/operation 19,470 RUB Uplifting and hauling down equipment and machinery by RUB/one hour of work 15,446.20 RUB 3 gantry cranes RUB/one running meter 569.94 RUB 4 Internavigational and navigational dockage of a vessel length a month Cofferdam operations 5 - lifting and hauling down (min.4 hours) RUB/hour 1,102.12 RUB - cofferdam operation (min. 2 hours) RUB/hour 986.48 RUB 6 Weighbridging RUB/one weighing 63.72 RUB Warehouses for rent: unheated warehouses of area of 7 2 2 2 869.5 m , 1,076.3 m and 1,493.4 m . 8 Office space for rent 9 We provide motor transport services For offer ships for rent - VOLGAR tug - URAL tug 10 - R-85 and P-85A project barges (2500 t); - Section 2 of the project 81500 (3000 t); - Sluice tug

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8. Samara – the region's administrative center

Distance from Samara to major cities (by road)

Tolyatti ~ 79 km Dimitrovgrad ~ 157 km Naberezhnye Chelny ~ 386 km Ulyanovsk ~ 242 km Kazan ~ 441 km N Ufa ~ 463 km

Penza ~ 444 km Magnitogorsk ~ 775 km Saransk ~ 470 km Chelyabinsk ~ 880 km

5 Saratov ~ 484 km Uralsk ~ 246 km Orenburg ~ 407 km Volgograd ~ 853 km Atyrau ~ 751 km Orsk ~ 674 km

At present time, Samara is the largest center of mechanical engineering and metal working, food processing, space and aircraft industries. There are more than 150 large and medium-sized industrial enterprises in the city. According to Volga-info, Samara now accounts for some 1/4 of all bearings made in Russia and 2/3 of all communication cables. Construction According to the Samara Branch of FSUE Rostehinventarizatsiya, as of 01.01.2010 the amount of housing in Samara is 24,031.8 th.m2, which means an area of 21 m2 per person. The share of multi-storey residential buildings in the total number of buildings is: · 47% · middle-rise building without elevators - 36% · low-rise buildings - 15% 9. CONTACT INFORMATION Address: Russian Federation 10a, 22 Parts'ezda st., Samara, 443022 Website: www.strommash.ru Tel/fax: +7 846 3 741 741 +7 846 3 741 740 E-mail: [email protected] [email protected]

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APPENDIX 1. MANUFACTURING ENTERPRISE MASTER FILE. 5. Enterprise master file Equipment Equipment type Processed parameters (mm.) model D=400mm; center-to-center manually controlled 1K62 distance 1000mm D=160mm; center-to-center CNC CBL500;300 distance 1500mm Lathes D=40; Ltreated automated machines 1V340; surf.max.=1000mm machining centers D=40; mm other 1I140P Lrod.max=3000mm manually controlled 6M13P Table=1600mm x 400mm CNC Millers machining centers Other prod. mill. with indic. UF5220 Table=2000mm x 6000mm circular ZA164 Dmax—320mm plain ZB722 Table=1000mm x 320mm internal bore ZA229 Dinner max - Ø400mm centerless ZM182 jig (coordinate) Grinders profile 395М D 150mm x 60mm polishing Dhone mах =500mm; honing Kh-385 Lhone mах=1500мм gear-shaving Other internal bore Wotan Dmах=750mm gear shaping 5А150; mmax=12 Dpart.max=1300mm MODUL; gear-hobbing Dpart.mах=3150mm mmax=30 gear-grinding 5831 Dmах=320mm Gear making and - gear-shaving threaders thread-cutting 5B07 Dнах.mах=39mm; Lthread=320mm thread-milling thread grinding 5872М Dmax=200mm Other spline milling 5320 DDmax=150mm vertically oriented drilling 2N135 Dhole mах. = 35mm horizontally oriented drilling radial drilling 2А576 Dhole mах.= 80 mm Drilling and boring coordinate drilling coordinate boring 2V440A Table 400mm x 800mm boring 2622V Dspindel = 110mm other 2652 Dspindel=160mm Light beam electrochemical Electrical and EDM electrochemical electrolytically assisted ultrasonic piercing other Thread rolling and cold thread rolling А2528 Dthread mах=70mm forging cold forging fitting and assembly, installation

Fitter's and assembly welding

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Shot blasting polishing, bead-blasting, chamber LxBxH = 6mx4mx4m tumbling Tumbling barre Intrusion molding Production of rubber

goods

Casting

Electric Mechanical galvanic heat chlorinators D=2500mm; H=6000mm Other metalworking treatment Chamber D=2000mm; H=1300mm furnaces PELLAMASH Special technologies Plasma cutting machine metal Up to 8 sheets=60mm thermal cutting and equipment cutting LXH=2000MMX6000MM machine

6. Description of the proposed route process for manufacturing parts in this order or main samples from groups of homogeneous parts in the order (this will give you an advantage in the selection of suppliers).

Whenever the required equipment is missing, please specify whether the order may be outsourced and indicate the name of the contractor, its contacts (contact person, telephone, e-mail address) and mix of equipment.

6. Organization of work: Yes, we do, in accordance with the 6.1. Do you have job descriptions in place? STP 058.5.5.364- 2009 Just-in-time 5S 6.2. Have any of modern production strategies Lean been adopted? Manufacturing Other (specify)

7. Quality management 7.1. Relationship with Suppliers . Every order is subject 7.1.1. Do you a tendering procedure in place? to tendering Yes, in accordance 7.1.2. Are suppliers evaluated in accordance with a regulation or with STP061.7.4.333- instruction? 2005

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7.1.3. Do you have stable relations with your suppliers? Yes, we do. for serial production? for planned production? In accordance with the 7.1.4. Specify, if you have any incoming control system in place. STF 059.7.4.328-05 7.1.6. Do you require that your suppliers have certificates? for products? Yes, we ask them to for production? provide certificates for products and ensure that they have a for quality system? quality management system in place 8. Quality management system. OBORONSERTIFIKAT 8.1. Do you have a certified quality management system in place? system, Certificate of If Yes: Compliance No. Certificate number: 6300.310606/Ru dd. 11.05.07 If No: How do you think, when a quality management system will be adopted in your company? Yes, we do, and the 8.2. Do you have a Quality Policy? name is RK54028986- 2008 8.3. Is there a documented system for product design and validation Yes, there is one. of output design data based on customer requirements? We perform 8.4. Do you control your products in the production process in operational and accordance with the approved procedures? Is quality data acceptance control. documented? Quality data is documented. We perform final 8.5. Do you have a final product control and testing in accordance inspection and tests. with approved procedures? Is quality data documented? Quality data is documented. Our main laboratory is duly certified, our 8.6. Do you have a certified laboratory (experts) for product control metrological service is and product testing? accredited for verification 8.7. Do you have a practice of identifying products by a contract Yes, we do. number? We have an accredited 8.8. Is there a system of metrological support of production? metrological service. 8.9. Do you archive quality data? Yes, we do.

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9.2. Large orders in the last 3 years (optional):

Contract price mln. Seq.no. Customer name Date and place Type of work RUB Manufacture of more than 40 machinery

units for the construction industry Total produced = 800.0 Government contracts for the

production of military equipment

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APPENDIX 2. PRODUCTION BUILDINGS AND FACILITIES Installed capacity, kW (of Overall dimensions of Hoisting equipment (cranes and runway Area exiting capacity of 12,000 Seq.n production facilities beams with a lifting capacity of > 1 t) Name kW) o. 2 3 3.2 5 10 15 16.5 20 Total incl. production area Length Width Height Primary Reserve t t t t t t t t 11,475.34 151.25 75.87 10.92 1 1 7 2 1 1 24 2,556.13 102.45 24.95 10.92 1 1 2 1 Shop No. 5 and 6 800 800 552.6 3,020.37 121.30 24.90 11.63 481.80 11.63 Mechanical and assembling shop No. 14 10,458.20 144.65 72.30 12.80 2 1,600 1,400 1 4 6 1 2 332.0 3,587.32 144.65 24.80 14.90 3 Mechanical repair shop No. 8 1,364.3 1,107.63 39.70 27.90 8.10 Annex to the mechanical repair shop 150 1 2 1 1 4 860.0 860.0 30.82 27.90 8.10 No. 8 (approximate figures) 5 Sand blast and paint area 1,715.8 1,217.61 48.90 24.90 7.20 100 1 1 Packaging workshop (shop No. 10, 6 2,704.6 2,222.72 60.40 36.80 9.70 500 3 2 shop No. 13) Group of shops No. 3 (shops No. 1 15 7 15,068.70 205.10 73.47 13.60 2,000 6 3 1 and 7, cabins) 979.7 899.10 48.60 18.50 6.05 887.55 48.50 18.30 8 Garage (50 places) 2,192.1 100 368.15 30.30 12.15 3.70 37.21 6.05 6.15 9 Warehouse for construction materials 1,162.7 903.44 48.52 18.62 9.70 2 10 Warehouse for rubber 610.6 610.62 48.27 12.65 7.75 2 11 Department of Main Store No. 1 838.0 668.17 21.80 30.65 7.55 1 1,538.82 61.80 24.90 6.00 450 12 Main Store (warehouse for spares) 3,126.4 238.51 18.78 12.70 6.00 3 13 Finished products warehouse (open) 3,433.00 433.00 30 TOTAL 26,875.97 7,900 047.10

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