STRICTLY CONFIDENTIAL FOR ADDRESSEE ONLY VALUATION REPORT # 12-MOSC-900262 LSR GROUP PORTFOLIO PREPARED FOR JSC GROUP LSR DATE OF VALUATION DECEMBER 31, 2012 FEBRUARY 25, 2013 A PROPOSAL FOR VALUATION REPORT # 12-MOSC-900262 PREPARED FOR JSC GROUP LSR LSR GROUP PORTFOLIO OF PROPERTIES LOCATED IN SAINT-PETERSBURG, MOSCOW, EKATERINBURG, AS AT DECEMBER 31, 2012 TABLE OF CONTENTS EXECUTIVE SUMMARY 1 A VALUATION REPORT 2 1 INSTRUCTIONS 3 2 BACKGROUND TO THE VALUATION 3 3 CONFLICTS OF INTEREST 3 4 BASIS OF VALUATION 4 5 INSPECTIONS 4 6 ASSUMPTIONS AND SOURCES OF INFORMATION 5 7 TENURE AND TENANCIES 5 8 NET ANNUAL RENT 7 9 TOWN PLANNING 7 10 STRUCTURE 9 11 SITE AND CONTAMINATION 9 12 PLANT AND MACHINERY 9 13 GENERAL PRINCIPLES 9 14 SPECIAL ASSUMPTIONS, RESERVATIONS AND DEPARTURES 10 15 MATERIAL CHANGE 10 16 VALUATION 10 17 DISCLOSURE AND PUBLICATION 11 18 AGGREGATE VALUATION 11 19 CONFIDENTIALITY 16 B MARKET OVERVIEW 18 C VALUATION AND VALUATION CONSIDERATIONS 82 D DESCRIPTION OF PROPERTIES 93 E APENDICES 289 VALUATION & ADVISORY CUSHMAN & WAKEFIELD EXECUTIVE SUMMARY LSR GROUP PORTFOLIO Valuation agreement: # 12-MOSC-900262 dated December 21, 2012 Date of the valuation December 31, 2012 Date of the report February 25, 2013 Period of valuation process December 2012 – March 2013 The name and the address of JSC Group LSR the Client Legal address: 36 Kazanskaya Street, Saint-Petersburg, Russia, 191031 Postal address: 36 Kazanskaya Street, Saint-Petersburg, Russia, 191031 OGRN 5067847227300 INN 7838360491 / KPP 783801001 Central OSB # 1991 / 0774 North-West bank of OAO Sberbank Rossii, Saint-Petersburg Operating account 40702810555230183587 Correspondent account 30101810500000000653 BIK 044030653 The name and the address of Cushman and Wakefield LLC the legal entity the Valuer has Legal address: Gasheka St., 6, Moscow, Russia, 125047, labor contract with Postal address: Gasheka St., 6, Moscow, Russia, 125047, OGRN 1047797054227 as of 06.10.2009. Information on the Valuer Konstantin Lebedev, a member of the Russian self-regulatory society of appraisers (registration #0000730 as of 22.08.2007), located at: 2A, 1st Basmanniy pereulok, Moscow, 107078. Legal address of the Russian society of appraisers: 21, Novaya Basmannaya St., Bld 1, Moscow, 107078. Insurance policy of liability: OAO Ingosstrakh (contract #433-039073/12 as of 22 June 2012). Degree in Business valuation (Diploma “ПП No: 517059” as of 28 June 2002. Professional experience of 10 years. Location/Situation The properties are located in Saint-Petersburg, Leningradskiy Region, Moscow, Moscow Region and Ekaterinburg. Portfolio Description The LSR Group portfolio comprises residential and commercial properties. Exchange Rate as at valuation $1 = 30,3727 RUR (Source: Central Bank) date Market Value of the Portfolio 119 921 010 000 Rubles Net of VAT (One Hundred Nineteen Billion Nine Hundred Twenty One Million Ten Thousand) This summary is strictly confidential to the addressee only. It must not be copied, distributed or considered in isolation from the full report. VALUATION & ADVISORY CUSHMAN & WAKEFIELD 1 A VALUATION REPORT VALUATION & ADVISORY CUSHMAN & WAKEFIELD 2 To: The Bord of Directors, JSC Group LSR 36 Kazanskaya Street, Saint-Petersburg, Russia, 190031 and Goldman Sachs International Peterborough Court 133 Fleet Street London EC4 2BB United Kingdom J.P. Morgan Securities Ltd. 10 Aldermanbury London EC2V 7RF United Kingdom VTB Capital plc 14 Cornhill London EC3V 3ND Portfolio: LSR GROUP PORTFOLIO Report Date: February 25, 2013 Valuation Date: December 31, 2012 1 INSTRUCTIONS APPOINTMENT In accordance with your request, as confirmed by the Valuation Agreement #12-MOSC-900262, dated December 21, 2012 (“Agreement”), concluded between Cushman & Wakefield OOO (“C&W”) and JSC LSR Group (“the Client”), we have considered each Property as set out below and made all necessary enquiries to provide you with our opinion of Market Value of the freehold interest in the buildings and the long leasehold interests and freehold interests in the land plots beneath the buildings. We understand that the current valuation will be used for regulated purposes only. No other purpose is intended or should be inferred. The properties and interests valued are detailed in Part D of this report. The extent of our professional liability to you is detailed in Part E of this report. We confirm that we have sufficient knowledge, skills and understanding to undertake the valuation competently. 2 BACKGROUND TO THE VALUATION We understand that this valuation report and the Schedule (together, the “Valuation Report”) are required for the completion of the Client’s financial accounts, dated December 31, 2012, and we hereby give our consent for such inclusion, this report may not be used for any other purpose. The effective date of the valuation is December 31, 2012. 3 CONFLICTS OF INTEREST A Conflict of Interest is defined by the RICS Valuation Standards (“the Red Book”) as: VALUATION & ADVISORY CUSHMAN & WAKEFIELD 3 ‘A threat to independence or objectivity’. Cushman & Wakefield have acted for the Client with respect to annual Valuation services, which were provided in January – March 2012 with respect to the LSR Group Portfolio, however, we do not believe that this creates a conflict of interest. 4 BASIS OF VALUATION The valuation and report has been prepared in accordance with the RICS Valuation – Professional Standards (the “Red Book") by a valuer acting as an External Valuer, as defined within the Red Book. We confirm that the valuer conforms to the stipulated requirements. BASIS A Basis of Value is defined by the Red Book as: ‘A statement of the fundamental measurement assumptions of a valuation.’ In accordance with our instructions from the Client, the properties in Part D has been valued on basis of Market Value. DEFINITIONS Market Value VS 3.2 defines Market Value as: ‘The estimated amount for which an asset or a liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.’ Market Value is an internationally accepted basis of valuation, entirely consistent with the normal valuation basis followed in each country where the Properties are located. The Properties are held either as properties held as investments, properties held for development, or properties in the course of development and we have therefore used the appropriate property investment and development valuation methodology to calculate Market Value of each Property. Our Valuation Report is also in accordance with the relevant rules and recommendations of PR 5.6.5G of the Prospectus Rules (and related guidance) published by the Financial Services Authority and the relevant guidance published by the European Securities and Market Authority. In this Valuation Report: LSR Group legal share (%) means the percentage stake that you have told us that the Client has in the legal entity by which the Property is held. For the avoidance of doubt we have valued a 100% share of the legal interest identified in each Property. 5 INSPECTIONS The properties were inspected by Joshua Askew MRICS, Director, Fedor Zavileysky MRICS, Senior Consultant, Irina Doshchenko, Senior Consultant, and Polina Mitina, Senior Consultant. All the information on the dates of inspection and by whom it was inspected is presented in Part D. The properties were inspected internally and externally from ground level. The properties were not measured and we have assumed that the development scheme areas measurements, areas and dimensions that the Client has provided to us are accurate and have been calculated by appropriately qualified VALUATION & ADVISORY CUSHMAN & WAKEFIELD 4 professionals in accordance with all the necessary requirements and the local standards of measurements. We have also relied upon the detailed information that the Client provided to us with regard to the internal measurements and dimensions and assume these are also accurate. Any variation or inaccuracies in the information provided to us would affect the opinion as to value reported herein. 6 ASSUMPTIONS AND SOURCES OF INFORMATION An assumption is stated in the Glossary to the Red Book to be a “supposition taken to be true” (“assumption”). Assumptions are facts, conditions or situations affecting the subject of, or approach to, a valuation that, by agreement, need not be verified by a valuer as part of the valuation process. In undertaking our valuations, we have made a number of assumptions and have relied on particular sources of information. We believe that the assumptions we have made are reasonable, taking into account our knowledge of the Properties, and the contents of reports made available to us. However, in the event that any of these assumptions prove to be incorrect then our valuations should be reviewed. The assumptions we have made for the purposes of our Valuations are referred to below. We have made an assumption that the information which the Client and its professional advisers have supplied to us in respect of the Properties is both full and correct. It follows that we have made an assumption that details of all matters likely to affect value within their collective knowledge such as prospective lettings, construction timetables, completion schedules, outstanding requirements under legislation and planning decisions have been made available to us and that the information is up to date. In completing the valuations