Special Economic Zone Definition

Special Economic Zone Definition Special Economic Zone means a part of the territory of the Russian Federation determined by the Government of the Russian Federation where a special regime for carrying on entrepreneurial business operates (RF Law dated 22.07.2005 116-FZ «Special Economic Zones in the Russian Federation», Article 2). 1 1

Technology Development Activities Definition Creation, production and sale of R&D products Creation and implementation of programs for computing machines (computer programs), database, topologies, microelectronic integrated circuits, information systems, Provision of services to implement and service such products, programs, bases, topologies and circuits. Production of R&D products within the boundaries of technology development activities special economic zone is allowed by resolution of the expert council for technology development activities special economic zones being governed by the priority lines in the development of science, technologies and equipment and the list of critical technologies of the RF approved by the RF Government (a part as amended on 28.12. 2009) (law 116-fz, clause 2 article 10) 2

Saint Petersburg Special Economic Zone Novo-Orlovskoye Section of SEZ Lands to be rented out From 2013 - lease of offices in the Technology Transfer Center ЗСД КАД Neudorf SEZ section Offices lease in the Administrative Business Center 3

Terms for SEZ functioning in Saint Petersburg Correspondence to clusters Biomedicine, including pharmaceutical Precision and analytical instruments industry IT technologies Energy-saving technologies Microelectronics Communications facilities Nanotechnologies Guaranteed support with engineering resources SEZ territory is completely supported with engineering resources for account of the RF budget and budget of Saint Petersburg (utilities infrastructure); Preferential connection to power sources (exemption from payment for technological connection to electrical power networks for 0.6 MW per 1 ha of land Legal guarantees to the residents, privileges Guarantees against worsening tax situation (Article 38 of the Federal Law dated 22.07.2005 116-FZ Special Economic Zones in the RF ; Tax and customs preferences; Streamlined mechanism for granting land, reduced rental for land, option to buyout the land after putting the project into operation, reduced rental for offices Opportunity to cooperate with the scientific-research centers Use of the staff potential, research facilities of the universities and RAS institutes 4

Tax reliefs for the SEZ residents Type of Tax Regulatory Act General Terms (RF, SPb territory) Within the Saint Petersburg SEZ boundaries Term Insurance contributions cl.1-4 Art.12 FL 272-FZ Pension Fund - 26% Pension Fund - 8% Pension Fund 13 % Pension Fund 20 % 2010-2017 2018 2019 cl.2 Art.57 FL 272-FZ Social Insurance Fund.- 2.9% Social Insurance Fund: 2% 2.9% 2011-2017 2018-2019 cl.2 Art.58 FL 272-FZ Federal Fund of Mandatory Medical Insurance^ 2011 3.1% 2012 5.1 % Federal Fund of mandatory medical insurance: 2% 4% 5.1% 2011 2012-2017 2018-2019 Territorial funds of mandatory medical insurance : 2011-2% 2012 0% Territorial Funds of mandatory medical insurance: 2% 0% 2011 2012-2019 Land tax (% of the cadastral value) cl.9 Art.395 RF Tax Code 1.5% (Max) 0% 5 years*) Assets tax cl.17 Art.381 RF Tax Code Art.11-1 SPb Law 81-11 2.2% 0% 10 years*) Transport tax cl.5-1 SPb Law 81-11 150 rbls/h.p. (Max.) 0 rbls. (except air and water vehicles) 5 years*) Profit tax cl.11-3 SPb Law 81-11 20% 13,5% Until 18.01.2026 *) upon arising of the ownership title 5

Provision of Land The Land is granted to the SEZ residents under the Agreement for technology development activities signed. If the land requested by the resident is not in the government cadastral records, the activity to form it and its governmental cadastral record shall be done for account of the SEZ resident (Art. 22 of the Federal Act dated 22.07.2005 116-FZ «Special Economic Zones in the Russian Federation»). The decree of the Russian Federation Government determines maximum size of the land rental to be granted to the SEZ resident in size of 2% of their cadastral value a year. The cadastral value of lands is fixed by decree of the Government of Saint Petersburg dated 28.11.2006 1432 «Approving Cadastral Valuation of Lands in Saint Petersburg»: SEZ Section Cadastral value per 1 ha, thous. rbls. Type of Land Functional Use Neudorf 11 690 Under industrial facilities 21 420 Under administrative-management facilities Novo-Orlovskoye 17 300 Under industrial facilities 34 410 Under administrative-management facilities 6

Cost of Renting Land within the SEZ territory for the SEZ residents Term of Agreement for Technology Development Activities Cost of Renting Land (under the order of the RF Ministry of Economic Development dated 14.07.2006 190) per 1 ha, rbls/year Neudorf section Novo-Orlovskoye section Type Of Functional Use Of Lands 1 st 93 520 138 400 Under industrial facilities 171 360 275 280 Under administrative-management facilities 2 nd 116 900 173 000 Under industrial facilities 214 200 344 100 Under administrative-management facilities 3 rd 140 280 207 600 Under industrial facilities Beginning from the 4 th year (within 5 years) Maximum size of payment 257 040 412 920 Under administrative-management facilities 163 660 242 200 Under industrial facilities 299 880 481 740 Under administrative-management facilities 233 800 346 000 Under industrial facilities 428 400 688 200 Under administrative-management facilities 7

Buyout of Lands in the SEZ territory where the properties built by the SEZ residents are located The land lessees-sez residents, owners of the properties created by them are entitled to buy out the land located under the said properties (in accordance with clause 3 Article 32 of 116-FZ dated 22.07.2005 Special Economic Zones of the Russian Federation ). The size of payment for the buyout of the land until January 1, 2012 is fixed by the Law of Saint Petersburg dated 15.02.2010 59-19 and equals to the thirteen-time rate of the land tax which is 1.5% of the cadastral value of the land in accordance with the Saint Petersburg Law dated 28.12.2005 611-86 (i.e. 19.5% of the cadastral value of the land). Size of Payment per 1 ha Use of land under industrial facilities Neudorf 2 279,55 thous. rbls. Novo-Orlovskoye 3 373,5 thous. rbls. Use of land under administrative-management facilities Neudorf 4 176,9 thous. rbls. Novo-Orlovskoye 6 709,95 thous. rbls. 8

Utilities support of SEZ resident companies Tariffs for energy resources consumption for 2011 (excluding VAT) Category Unit SEZ Section Namen of Utility Company Cost Electricity supply kwh Neudorf Novo-Orlovskoye Heat supply Gcal Neudorf Novo-Orlovskoye Gas supply 1000 m3 Neudorf Novo-Orlovskoye Energy Holding OOO SEZ OAO SUE TEC SPb Peterburg-Regiongas ZAO Flat-rate tariff 2663.06 rbls. Hot water 612 rbls. 1207.34 rbls. 3255 rbls. Water supply Cub.m Neudorf Novo-Orlovskoye Water disposal Cub.m Neudorf Novo-Orlovskoye Southwestern Vodokanal Right bank Vodokanal Southwestern Vodokanal Right bank Vodokanal Fresh water 18.70 rbls. 21,74 rbls. 21,74 rbls. 9

10 Free Customs Zone Free customs zone means customs regime under which: Foreign goods are place and used within the SEZ without payment of customs duties and value added tax as well as with no enforcement of bans and restrictions of economic nature on such goods set forth in accordance with the RF laws on governmental regulation of foreign trade activity, And the Russian goods are place and used on the terms applicable to import in accordance with the customs export regime with the payment of excise and without payment export customs duties. Goods are placed by the SEZ residents under the customs regime of such free customs zone in order to carry on technology development activities. The following is placed under the customs regime of such free customs zone: Goods brought in to the RF customs territory from the territories of foreign states; Goods brought in to the territory of the special economic zone from the other part of the RF customs territory; Goods located in the SEZ territory and acquired from persons who are not residents of such special economic zone. Article 37 of federal act 116-fz

Customs duty relief for residents Flow of Russian goods Flow of foreign goods duties 0, VAT 0%, excises Import from RF territory Free customs duties 0, VAT 0% Import from abroad VAT 18%, excises Export to RF territory Export abroad Export duty, VAT 0% S E Z zone duties, VAT 18%, excises Export from RF territory Export abroad Export duty, VAT 0% 11

Procedure for obtaining the SEZ resident status WHO? Can become a resident HOW? Commercial companies (or individual entrepreneurs) 4 steps Not having branches or representative offices outside the SEZ territory 1 2 3 4 Registration in Saint Petersburg, development of business plan, application to the branch of SEZ OAO Approval of such business plan by the Supervisory Board and approval by the Expert Council Entering into the Agreement for technology development activities with the RF Ministry of Economic Development Carry on exclusive activities in SEZ contemplated by Agreement and business plan 12

Neudorf Section areas residents Plots for accommodation of objects SEZ and customs Administrative Business Complex Total area of space to be leased: 5 187,2 sq.m Free area: 2 141,6 sq.m areas residents 13

Infrastructure of Neudorf Section Administrative Business Complex ABC performance indicators: Total area - 14 280 sq.m. Number of floors 8 (zero floor car parking, 8 th floor - mechanical) Area of one floor: 1 400 sq.m. Total area of space to be leased: 5 187,2 sq.m Free area: 2 141,6 m 2 2nd floor: 119,6 m 2 3rd floor: 117,2 m 2 4 th floor: 329,2 m 2 5 th floor: 1176,1 m 2 (if all the floor - 1449,3 m 2 ) 6 th floor : 399,5 m 2 Reduced rental rate for 2011 of 380 rbls./m2 is provided for company residents Administrative space, including: Exhibition facilities; Conference hall with the system of simultaneous translation; Press center, press conference hall Meeting rooms Checkpoint 1 Checkpoint 2 Own boiler house with Viessmann equipment Customs infrastructure (fencing of the area, Checkpoint 1, checkpoint 2) Underground parking for 46 car spaces Ground parking for 152 car spaces 14

External infrastructure of Novo-Orlovskoye section Located in the Primorsky District of Saint Petersburg, to the north of the Novo-Orlovsky urban forest The area borders with the territory of the Russian Academy of Sciences institutes: Institute for Electrophysics and Electric Power RAS Ioffe Physical-Technical Institute Institute for Applied Astronomy RAS Car manufacturing plant Nissan is located not far from the area Legend: Existing roads Roads designed Metro stations designed Saint Petersburg completely ensures the territory with the transport infrastructure, including excess to the Motor Ring Road (Parashutnaya Ul. from Dolgoozernaya Ul. to Motor Ring Road) 15

External infrastructure of Novo-Orlovskoye section External infrastructure 0 Канализационный коллектор (план ввода конец 2010-начало 2011 гг It is provided connection to the networks of electricity supply, water supply. There is an engineering option to connect to the sewer network after putting into operation of the tunnel collector Severnaya Dolina Northern Valley. Gas pipe line is under construction. Infrastructure inside SEZ territory Term for support with the engineering utilities in the SEZ territory: for construction needs IV quarter 2011; for carrying on technology development activities I quarter 2013. For resident companies guaranteed connection to energy resources without payment to connecting capacities 0.6 MW per 1 ha of land leased 16

Infrastructure in the territory of Novo-Orlovskoye section 4 3 2 1. Technology Transfer Center with business incubator area 15 000 sq.m (commissioning II quarter 2013); 2. Administrative business center with exhibition facilities total area 25 000 sq.m (construction period 2013-2014) 3. Innovation center Nr. 1 area 12 000 sq.m (2014-2015); 4. Innovation center Nr 2 area 18 000 sq.m (2015-2016); 5. Infrastructure for arrangement of the customs point total area 1450 sq.m with fencing of the site, length 8 km; 6. Site roads of total length 5.35 km. 5 1 Site and Offsite utilities: Storm water system with treatment facilities volume 2280 cub.m./day. Total length 7 km; Sewer network of total length 5.47 km; Water supply system of total length 9.46 km; Telecommunications, computer communication 10 km; Heat supply 5.37km; Electricity supply. 6 18

Infrastructure in the territory of Novo-Orlovskoye Section Technology Transfer Center with business incubator Commissioning II quarter 2013 Total area of the building - 15 143 m 2 Usable area - 13 554 m 2 Including: Public space 4 910 m 2 Service and amenities space 1 151 m 2 Office space 4 153 m 2 Engineering and utilities space 746 m 2 Administrative space 2 452 m 2 Crawl space 1 139 m 2 Administrative Business Center with Exhibition Facilities Commissioning - 2014 Total area of the building - 25 510 м 2 Structural volume - 119 213 m 3 Construction area: - 7 700 m 2 Number of floors - 9 floors Usable area - 24 246 m 2 Including: Public space 9 382m 2 Office space 9 619 m 2 Administrative space 1 515 m 2 19

Technology Transfer Center with business incubator 20

Technology Transfer Center with business incubator 21

Technology Transfer Center with business incubator