Closed joint stock company of workers «Public Enterprise «Zavod Iskozh» Yoshkar-Ola

Yoshkar-Ola is the Capital of the Republic of Mari El

The factory is situated in Central Russia in 750 km from Moscow by federal road M7 and 550 km to Tolyatti Location

General information about company: ZAOr «NP «Zavod Iskozh» produces artificial leather for cover, moldable PVC films, floor coating and sound insulation for producing seat covers, roofs, doors and another parts of car interior, also furniture, fancies and artificial materials with annual volume: Artificial leather for cover - 3,5 million.sq.m per year Moldable PVC films thousand.sq. m per year Floor coating – 430 thousand.sq. m per year Sound insulation materials – 650 thousand.sq. m per year

The company was founded in Nowadays the total area of ZAOr «NP «Zavod Iskozh» is 30 thousand sq. m., including production ,4 sq.m. At the present moment the factory has all necessary equipment and competent personnel, providing complete cycle of the production – starting from development till finishing. The basis of ZAOr «NP «Zavod Iskozh» policy is meticulously to meet product quality requirements of customer, to observe volumes and delivery periods. On the company there is introduced and operated Quality management system according to the requirements of ISO 9001:2008 DUNS number

Employees Managing personnel– 44 Engineering manpower – 48 Workers – 352 Total- 444

Production volume in $, mln (in terms of average annual value at the rate of Central Bank)

Product

Structure by Product (2012)

Consumer Geography Iskozh KAMAZ Sollers UralАZ VAZ UAZ PAZ GAZ Autoframos MAZ МTZ Rostselmash

Production: calender line

Production: coating line

Laboratory The quality of entering raw materials, inter-op and final checking of product is made by central factory laboratory.

STRATEGY A long term sustainable growth philosophy Priority short-term projects, providing further strong long-term business success Aligning our automotive cost structure with market realities Flexibility / adaptability / our automotive structures under the actual cost of the market Automotive as a core business Investing for the future Production capabilities Human Resources and expertises, certifications Innovation

Short-term strategy Lean engineering to reduce program cost Strengthening the market position Capacity utilization Search and expansion of raw material suppliers Working closely with key base of suppliers to optimize cost reduction technology Develop internal reserves A step in the right direction - a step to success

Problem of today  Find partner on mutually beneficial terms Sector - Automotive market in Russia. Why Automotive market? One of most promising markets in Russia: Carport Russia million, of which 52%> 10 years

Problem of today Growth of income of population from year to year: a % % Decrease in car loan rates, including preferential loans for purchase of car. As of the subsidy is - 5.5% Example: Credit for 1 year when buying or LADA Granta NEW LADA Kalina (payment of 35%), the credit rate - 0%

What do we have? Capacity Human resources Experience in product localization: AvtoVAZ project /"Plastic" Sizran/ PVC sheeting for molded part door instead of the product Vowalon (Germany), reduction of price - 26,3 % Research base, carrying out some tests in a research center AvtoVAZ We have access to car factories and automobile assembly plants in Russia

Our pros + Business prospects of the automotive market in Russia –Sales of passenger cars, million : 2012 – 2.7 forecast: Unconditional support from the head of government of the Republic of Mari El, Mr. Markelov. + Adaptation to the Russian mentality, the specifics of doing business

Our pros + Focus on results + Local point for Russian business projects + Geographic proximity to the major Russian car factories + Regional warehouse in St. Petersburg, Moscow area + Russia's accession to WTO + Increase the level of localization of industrial assembly – 60%

Our expectations? We expect from our partner:  Match or partial match technology  Focus on automobile direction  Financial stability and ability to invest (if necessary)  Possession of advanced technology to create an OEM Produc  Intellectual support

Our primary goal? AvtoVAZ  Why AvtoVAZ?  L arge volumes AvtoVAZ car sales  Best selling car brands in Russia market share of LADA:  Phase 1: Improving quality to maintain its leading position 2012 – 18 % 2013 – 19 %  Phase 2: Entering into new segments 2014 – 18 % 2015 – 20 % 2016 – 22 %  Phase 3: Maintaining leadership positions 2017 – 24 % 2018 – 24 % 2019 – 23 % 2020 – 23 %

 Why AvtoVAZ?  Perspective / especially with advent of alliance Renault-AvtoVAZ-Nissan steady growth of output in plant plans release: 2013 г. – 700 thousand 2020 – 1.2 million, from them – 200 thousand Renault brand, Nissan

F irst step for possible cooperation The first possible step-term cooperation. A joint project of production of artificial leather upholstery "lever" for production of a cover of the check point lever the car - under the project AVTOVAZ One of options of implementation of the project – the technical agreement. Our offer

Why this position?  Topicality AvtoVAZ has some concerns on this product Need a supplier willing to provide the best option price / quality  Perspective Annual demand AvtoVAZ with the prospect: square meters square meters We need:  Mutual desire of both partners  Mutual benefit