Economic and Investment Potential of Saratov Region

2 Saratov Region is a territory for investment  Regional center – Saratov city  Total land area – thousand km2  Population – 2,584 thousand people  Manpower resources – 1,647 thousand people  Distance from Moscow city – 858 km  Extent of state border with the Republic of Kazakhstan– 550 km  Southern temperate climate Saratov Region

3 Economic indices Agricultural production billion rubles Growth 202% billion rubles Commissioning of residential houses ,9 thousand sq. meters Growth 233% thousand sq. meters

4  Own regional oil-and-gas production, 100% gasification of inhabited localities and enterprises.  Own oil refining at Saratov Oil Refinery Factory, stability of fuel market.  Considerable deposits of hydrocarbon raw materials in bowels - gas, oil, petro-condensate, oil shale with shale gas and shale oil.  Superfluous electric energy supply – Balakovo Nuclear Power Plant, Saratov Hydroelectric Power Station, 6 Thermoelectric Power Station – the volume of generated electricity is 41 billion kWh, regional intake is less than 30% of the volume output. Low cost of electric energy. Investment potential of Saratov region Competitive advantages of the region:  Considerable deposits of mineral raw materials - chalk, limestone, carbonate for use as cement raw material, clay rocks for brick manufacture, expanded clay, cement, sand and sandstones, mineral balneological waters, medical, high quality table waters, potassium and magnesium salts, sulfur, phosphates, siliceous rocks, mineral paint sienna, etc.  Availability of free agricultural lands (more than 650,000 hectares), lands of settlements, lands for industrial use with communications and power and heat capacities.  Low rental fee (agricultural lands – 0.3% of cadastral value, other lands – 2% of cadastral value), average level of cadastral value of land plot meant for manufacturing and office buildings, constructions, industrial buildings, communal service, material and technical supply, food supply, merchandising, and provision in Saratov is 16,825.5 rub./m2, in municipal areas it makes ≈399.0 rub./m2 depending on location.  Tried-and-true procedure of land plots assignment under investment projects in shortest and exact terms, according existing legislation. 6

5  Low cost of labor force –2.5 lower than in Moscow region (average salary in the Region is 12 thousand rubles, in Moscow – thousand rubles).  Low prime cost of house making, construction of industrial and commercial real estate (and as a consequence short rental rates on the real property). Advantageous geopolitical location of the region. Proximity to Moscow mega city (858 km) with the mighty consumption market. Southern moderately continental climate, duration of winter period is a month less than in Moscow that allows reducing charges for heating, illumination of premises and technical services. Region’s location in a favorable fourth light zone that considerably reduces the cost price of production of a hothouse complex.  High level of communications and telecommunications.  Significant cultural, medical and educational potential.  Low cost of holding nature protection and ecological measures.  Presence of skilled manpower resources.  Developed banking, insurance, stock and commercial sectors.  Intelligent transport, engineering and logistic infrastructure. Competitive advantages of the region: :

6 Availability of the regional legislation providing the most preferential tax treatment for investors:  Law “On the Most Favored Nation Treatment for Investors in Saratov Region” №116-ZSO of June 28th,  Law “On Tax Rate on Organizations’ Profit with Regard to Investors Engaged in Investment Activity in  Saratov Region” №131-ZSO of August 1st,  Law “On Levy of Property Tax for Organizations at the Territory of Saratov Region” №73-ZSO of November 24th,  Law “On Transport Tax Levy in Saratov Region” №109-ZSO of November 25th,  Law “On Pledge Fund of Saratov Region” №92-ZSO of October 2nd,  Regulation of the Government of the Saratov region “On Approval of Exemplary Form of Investment Contracts, Form of Investment Certificate, Written Application of Investors, Record of Investment Contracts’ Register and Its Form” №305-P from August 27th, Competitive advantages of th region:

7 Competitive advantages of Saratov region: low cost of technological connection and basic charges Gas rates Directions of gas consumption Rubles/thousand cub. m. Trade prices for gas, extracted by “Gazprom” and its affiliated entities and sold to consumers of Saratov Region (except population) Trade prices for gas, extracted by “Gazprom” and its affiliated entities and sold to consumers of Moscow Region (except population) Rates for services for gas transmission into gas distribution networks and customers groups, rubles /thousands m3 Gas supplier Gas consumption volume, million cubical meters/year Upwards of 500 from 100 to 500 inclusive from 10 to 100 inclusive from 1 to 10 inclusive from 0,1 to 1 inclusive from 0,01 to 0,1 inclusive up to 0,01 inclusive “Saratovgaz” “Mosoblgaz”

8 Rates for technological access to electric power lines Стоимость услуги в Саратовской области № ZoneVoltage levelAmount of charge, rubles/ kilowatt 1 Saratov, Engels, Balakovo Voltage level less than 35 kilowatt Power less than 10,000 kilovolt-ampere Other municipal units of Saratov Region Voltage level less than kilowatt Power less than 10,000 kilovolt-ampere Voltage level less than 6-10 kilowatt Power less than 10,000 kilovolt-ampere Cost in Moscow № AreaVoltage levelAmount charge rubles/ kilowatt 1 Inside Sadovoe ring road Average voltage Low voltage Between Sadovoe and 3 transport ring roads Average voltage Low voltage Between 3 transport ring road and Moscow Ring Road Average voltage Low voltage Beyond the Moscow Ring Road Average voltage Low voltage Competitive advantages of Saratov region: low cost of technological connection and basic charges Water supply and disposal rates Supply organization Water supply, rubles/ m3Water disposal, rubles/ m3 "Saratovvodokanal" "Mosvodokanal"

9 The following tax remissions have been introduced in Saratov Region in January 1, 2008 : - the rate of profits tax to be transferred to the regional budget is reduced down to 13.5%; - property tax is reduced from 2.2% down to 0.1%; - full transport tax exemption. Period of validity of tax holidays is set up for 5 years from the date of starting investment activity. Competitive advantages of the Saratov region:

10 By today, we have created exclusively favorable investment climate, which certainly will have a prosperous effect upon the outcome of your industrial and commercial activity in our By today, we have created exclusively favorable investment climate, which certainly will have a prosperous effect upon the outcome of your industrial and commercial activity in our region REPRESENTATIVE OFFICE OF THE GOVERNMENT OF THE SARATOV REGION TO THE GOVERNMENT OF THE RUSSION FEDERATION 7 Podkopaevsky lane, building 3, Moscow Russia Tel.: +7(495) , , fax: +7(495) Deputy Chairman of the Government of the Saratov Region – Mr. Alexander Zhandarov MINISTRY OF INVESTMENT POLICY OF THE SARATOV REGION 72, Moskovskaya str., Saratov Russia Tel.: +7(845-2) ; fax: +7(845-2) Minister – Ms. Irina Blohina Contact information:

11 Thank you for your attention!