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General Manager PROMTRACTOR JSC CHAZ JSC KURGANMASHZAVOD MLODIK Semyon Gennadievich Cheboksary, August 2005 General Manager PROMTRACTOR JSC CHAZ JSC KURGANMASHZAVOD MLODIK Semyon Gennadievich Cheboksary, August 2005

MISSION PROMTRACTOR Solving customers demand in completing and maintaining wheeled and tracked machinery and MISSION PROMTRACTOR Solving customers demand in completing and maintaining wheeled and tracked machinery and technological system for common excavation, transferring bulk solids, pipeline construction and timber harvesting. CHAZ Production and carrying out supplies of high durability elements of undercarriage systems for assembling plants of largest producers of industrial machinery as well as forgings, steel- and iron-castings.

PROMTRACTOR AND CHAZ Promtractor as well as Promtractor-Promlit and Promtractor-Servis – enterprises with almost PROMTRACTOR AND CHAZ Promtractor as well as Promtractor-Promlit and Promtractor-Servis – enterprises with almost 30 -year experience of designing and manufacturing tractor machinery and spare parts for them CHAZ (Cheboksary Aggregate Works) – more than 48 years is a supplier and high-quality elements for undercarriage systems for assembling plants of largest producers if industrial machines as well as forgings, steel and iron castings. The main activities of enterprises are : l tractor machinery; l components for assembling lines; l spare parts for tractors and automobiles; l elements of freight cars. Overall production territory – 1 800 000 square meters

TECHNOLOGIES AND EQUIPMENT - PARTNERS TECHNOLOGIES AND EQUIPMENT - PARTNERS

MARKETING STRATEGY : EXPORT DIRECTIONS FOR 2005 -2006 Market CIS § Ukraine; § Middle MARKETING STRATEGY : EXPORT DIRECTIONS FOR 2005 -2006 Market CIS § Ukraine; § Middle East (former SU republics) Foreign countries § South-Eastern Asia; § Latin America; § Middle East; § Africa. Product § creating specialized modifications, adapted to the requirements, demanded be local market; § production and supplying sets for assembling plants; § launching into production and sales the complete sets of undercarriage elements for tractor machinery. Promotion § development and implementing sales programs directed for specific markets. § localization of tractor machinery in regional markets § organization of maintenance and spare parts supplies

MARKETING STRATEGY: RUSSIA’S MARKET DIRECTIONS FOR 2005 -2006 Market § oil and gas industry; MARKETING STRATEGY: RUSSIA’S MARKET DIRECTIONS FOR 2005 -2006 Market § oil and gas industry; § energy; § gold-mining industry; § coal and mineral-mining industry; § road construction; § Russian railways; § timber industry § municipal economy. Product § enlargement of quantity of base models and creating specialized modifications, adapted to customer’ requirements; § launching into production and sales the whole set of tractor undercarriage elements. §Promotion § § offering to a customer of new conditions of purchasing machinery; developing service net; transferring spare parts to the consumption regions; localization of services into regional markets.

INSTRUMENTS OF PRODUCT PROMOTION Communication § regional presentation; § branding; § industrial exhibitions; § INSTRUMENTS OF PRODUCT PROMOTION Communication § regional presentation; § branding; § industrial exhibitions; § specialized magazines; § corporative magazine. Sales stimulation § Individual approach to a customer; § leasing; § Trade-In; § forfeiting. Market measuring § Marketing research; § Evaluation of customer’s satisfaction; § Establishing consulting counsel with participation of leading domestic and foreign consumers.

INNOVATIVE POLICY MAIN DIRECTIONS § using newest technologies; § equipment modernization; § increasing quality; INNOVATIVE POLICY MAIN DIRECTIONS § using newest technologies; § equipment modernization; § increasing quality; § outsourcing.

Promtractor’s The first deputy of General Manager CHAZ’ deputy General Manager for sales Nikolay Promtractor’s The first deputy of General Manager CHAZ’ deputy General Manager for sales Nikolay Aleksandrovich GROMOV

Directivity for a client - Philosophy of the activity of the group of companies Directivity for a client - Philosophy of the activity of the group of companies «Promtractor» .

PARTNERS READY-MADE MACHINERY AND SPARE PARTS PARTNERS READY-MADE MACHINERY AND SPARE PARTS

DIRECTIVITY FOR A CLIENT Consumer Sales stimulation program Perfecting the product Maintenance Our goal DIRECTIVITY FOR A CLIENT Consumer Sales stimulation program Perfecting the product Maintenance Our goal is to increase customer’s satisfaction through increasing quality of products and services

SALES STIMULATION PROGRAM Leasing LEASING — the form of a long-term rental contract implying SALES STIMULATION PROGRAM Leasing LEASING — the form of a long-term rental contract implying the right of leasehold redemption. Leasing stock of orders by 01. 08. 05 makes 186 units of machines for total of 14 million USD. Forfaiting FORFAITING— crediting of international operations in the form of purchasing from the exporter bills of credit, accepted by and importer. The system of deferred payments for a period of 1 to 7 years depending on the customer’s country is established. There is a working contract concluded with a company “KAZPHOSPHAT” for total of 1, 6 millions US dollars.

SALES STIMULATION PROGRAM TRADE IN There are 4, 5 thousand tractors of 15 -35 SALES STIMULATION PROGRAM TRADE IN There are 4, 5 thousand tractors of 15 -35 tons in use in Russia with a life time of more than 5 years. The market capacity of second-hand tractors exceeds 200 millions USD. According to TRADE-IN program used equipment of the following producers is accepted : § Promtractor; § Caterpillar; § Komatsu; § Chelyabinsk Tractor Plant.

Service Modernization of the material base of the service net Move of the spare Service Modernization of the material base of the service net Move of the spare parts to the regions Providing working condition of machines during life-time Technical Audit Technical service and repair of tractors

SERVICE Modernization of the material base of the service net “Promtractorservice” jsc. has changed SERVICE Modernization of the material base of the service net “Promtractorservice” jsc. has changed its ideology for aiming at technical service and tractors repair Technical equipment of the service centers Mobility of the service increased Three mobile service stations «МАРТ» introduced Engines service is organized We got the authorizations to serve three type of engines • ЯМЗ; • CUMMINS; • IVECO. Technical equipment is modernized Introduced: • Engine Diagnosis and Repair equipment of Cummins (6 sets; • «Тest» system; • Space diagnosis system – «Open coordinates» . Supply of spare parts Organized: • 14 territory warehouses of CHAZ (based at Service centers); • 130 Dealers net is organized in regions

Service Moving of the spare pars stocks in the regions CHAZ Central warehouse Dealers’ Service Moving of the spare pars stocks in the regions CHAZ Central warehouse Dealers’ stocks in the regions CHAZ warehouses on the base of “Promtractor” Service centers Mobile warehouses of CHAZ • Q-ty of CHAZ regional dealers is increased on 26% (130 organizations totally); • 14 territory spare parts are set on the base of “PROMTRACTOR”Service Centers

SERVICE Organization of technical audit • 280 Clients’ specialists were trained to service and SERVICE Organization of technical audit • 280 Clients’ specialists were trained to service and to operate the machinary • Tractor fleet optimization in «СУЭК» , «Полюс» , «Алроса» companies were initiated. Technical Audit Scheme Classification of the tractors fleet Appointment of terms and conditions of the fleet optimization Analysis of the technical condition of the fleet Design of technical background of the project fulfillment Mining works technology study Development of proposal for optimization Optimal works technologies modulation Planning of the requirements of the machinery of different classes

Service Tractors Technical Service And Repair 1. Realization of the Programme of the Subscribers’ Service Tractors Technical Service And Repair 1. Realization of the Programme of the Subscribers’ service. 2. 12 Contracts for complete service of 114 machinery units were 3. Concluded with the companies , and among them : • ОАО «Russian railways» ; • ЗАО «ПМК 5 -Центргаз» (Gazprom); • ООО «Бургаз» (Gazprom); • ЗАО «Слюдянка» . According to the contracts service for 21 million rubles was made. 2. Capital and maintenance repair service was made for 22 million rubles

Service Reduction of the term of the repair of the tractor under guaranty period Service Reduction of the term of the repair of the tractor under guaranty period days 20 18, 4 18 16 14 11, 7 12 9, 8 10 8, 3 8 6, 0 6 4 2 0 2001 2002 2003 2004 2005

Goods Modernization Operator’s work condition improvement Development of the base product line Increase of Goods Modernization Operator’s work condition improvement Development of the base product line Increase of the quality stability Improvement of the production technology level Increase of the goods consumption conditions Decrease of the cost of diagnostics and repair Outsourcing Adoption to the territory conditions Designing new machinery

Development Of The Product Line Low class tractors of CHETRA Brand was awarded by Development Of The Product Line Low class tractors of CHETRA Brand was awarded by the Silver medal «Year Brand/EFFIE-2003» Today we introduce to the market the new sub-brand CHETRA-HEAVY Line of heavy duty industrial tractors of the world class

Development of the Product Base Line § Engine Cummins QSK 19 C; § power Development of the Product Base Line § Engine Cummins QSK 19 C; § power 590 hp; § weight 68 тn. , § Transmission microprocessing control; § Noise and vibration proved cabin, § Hydraulic servo control of the attached accessories ; § Engine electronic control Running Resource before the capital repair 18 thousand mth Fault free term as per analogous international tractors. Technical efficiency is 6 -12% higher than that of the international analogue

Development of the Product Base Line Acceptance trial Bulldozer CHETRA 9. 01, Krasnodar Region Development of the Product Base Line Acceptance trial Bulldozer CHETRA 9. 01, Krasnodar Region Company «Даурия-ЮГ» (2 pcs. ) – nonfailure operating time since 01. 11. 04 г. makes 3700 and 3800 mth Loader CHETRA 60. 01, Nerungry Company «Малые разрезы Нерюнгри» (2 pcs. ) -nonfailure operating time since 01. 04 г. makes 6000 and 8000 mth

EXTENDED GAMMA OF THE BASE PRODUCTS Bulldozer CHETRA 11 unified with CHETRA 9 : EXTENDED GAMMA OF THE BASE PRODUCTS Bulldozer CHETRA 11 unified with CHETRA 9 : Reduced height for 200 мм; Hydraulic control of the attached implements Microprocessor control of movement; Improved toughness of the frame from applying casted back axle Family of the wheel machines based on CHERA 60 CHETRA 60 Л – for working on timber-handling bases • CHETRA К-11 – compactor for compression of domestic waste; • CHETRA Б 11 – wheel machine for fulfillment of the dozer works Axles produced by “FON” (Poland), transmissions “DANA SPICER” (Belgium), hydraulic steering and hydraulic pumps “ZAUER DANFOSS” (Germany. Denmark) are applied in the machine construction.

EXTENDED VARIETY OF BASE PRODUCTS • track groups for tractors Komatsu D 375, D EXTENDED VARIETY OF BASE PRODUCTS • track groups for tractors Komatsu D 375, D 155, Caterpillar D 9 H, D 10 N/R, D 6 R, СHETRA HEAVY 4 are launched into production • realization of the program for installing production of sets «track group-track roller» for tractor machinery of imported machinery (Caterpillar D 7, D 8, D 10, D 11, Dressta TD 15, TD 25). • increasing of production capacities for manufacturing axlebox frame А 100. 10. 009 -0 and friction strips М 1698. 02. 001/003 for railway freight cars; § the production of sprockets and track groups for riceharvesting equipment T-150 have been started, § the production of з-channel water-heating radiators have been started ; the production of design-locks have been started. •

CREATING SPECIAL MACHINES • • • Machine complex for railways transport system and the CREATING SPECIAL MACHINES • • • Machine complex for railways transport system and the divisions of emergency situations; specialized machine for transferring assembling lines at mineral-mining enterprises; specialized dozer for application in mines; • creating of machine complex for pile driving, carrying out drilling works and anchor screwing (together with the factory of construction machines).

ADAPTATION TO ENVIRONMENT OF APPLICATION SITES Climatic § § § Eberschpeher heaters (Germany); neutralizer ADAPTATION TO ENVIRONMENT OF APPLICATION SITES Climatic § § § Eberschpeher heaters (Germany); neutralizer for working in mines (Kazakhmys); air scrubbing of advanced dust filtration; Convecta conditioners (Germany); variants of lacquer coating for tropical application of spare parts. Geological § variety of machines Т 11. 01 ЯМ, Т 15. 01 ЯМ, Т 20. 01 ЯМ, ТМ 25. 01 with specific soil pressure 0. 76 to 0. 43 kg//square m; § sprung undercarriage system for Т 20. 01, CHETRA HEAVY 4. Ecological Installing imported engines of Cummins and Iveco with up-to-date ecological characteristics of European standards (ЕURO 3 and ЕURO 4)

INCREASING OF TECHNOLOGICAL LEVEL OF PRODUCTION § introducing a unique in capacity cross-wedged mill INCREASING OF TECHNOLOGICAL LEVEL OF PRODUCTION § introducing a unique in capacity cross-wedged mill for manufacturing bodies of revolution (shafts, axis) for increasing quality of track roller shafts; § applying to production new processing centers Mazak, Mitsubishi (Japan), used for manufacturing high-precision tool set ; § purchasing laser complex Mazak (Japan) intended for improving accuracy and efficiency of manufacturing sheet articles; §planned for September 2005 launching induction furnaces in iron-cast workshop that allows to increase stability of the structure of cast iron as well as mastering production of castings from ductile iron; § implementing technology of vacuum-film moulding of large- sized cast by «Genrich Vagner-Sinto» license (Germany-Japan) that allows to improve the quality of castings

IMPROVING OPERATOR’S COMFORT Launched into production: § cabin of the 5–th generation «Buran-styling-atelier» (Russia); IMPROVING OPERATOR’S COMFORT Launched into production: § cabin of the 5–th generation «Buran-styling-atelier» (Russia); § cabin heaters «Ebenspeher» (Germany); § conditioners Convecta (Germany); § electro-hydraulic transmission control Omega (Russia); § hydraulic control of ripping equipment Bosch-Reksrot» (Germany); § designing solutions for improving dust-safety; § microprocessor-based control over the gear-box Omega (Russia), Dana (Belgium). § COSTS OPTIMIZATION FOR DIAGNOSTICS AND REPAIRMENT Launched into production: § diagnostic center «TEST» for tractor acceptance after assembling; • diagnostic system «SKAZ» , for diagnose during the operating process; • satellite system of distant diagnosing «Open Coordinates» ; • centralized lubrication system «Lincoln» , for reducing servicing labor costs

INCREASING OF QUALITY STABILITY Incorporation of approaches «Statistic process control» The audit of CHAZ INCREASING OF QUALITY STABILITY Incorporation of approaches «Statistic process control» The audit of CHAZ JSC was conducted by Caterpillar representatives Toughening of technological discipline of production Recertification СМК ISO 9001: 2000 The electronic system of acceptance of tractors «ТЭСТ» was incorporated STABILITY OF QUALITY Certification of the system of ecological management ISO 14000: 2000 Realization of the draft «total production optimization» Training and motivation of personal

Warranty Till july 2005 г. warranty terms enlarged: However if operating time during the Warranty Till july 2005 г. warranty terms enlarged: However if operating time during the first year exceeds 3000 operating hours, Warranty is prolongated for one more year. Without any reduction of operating time. If 1 st year operating time lesser warranty makes up 24 months, but no more than 3000 operating hours. Warranty period for spare parts such as track group and rollers for tractors Т-170, D 355, D 60, D 9 N, D 155, enlarged by 400 operating hours for soils containing no more than 35 % quarts and now it is 2200 operating hours.

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