PARI INSURANCE COMPANY

PARI INSURANCE COMPANY data on activity of the company for 2006

CONTENTS COMPANY HISTORY...3 COMPANY TODAY...4 RESULTS OF THE YEAR...5 INSURANCE ACTIVITY DYNAMICS...6 COMPANY RATING...7 FINANCIAL STATEMENTS...8 REINSURANCE THE POLICY...9 POLICY OF RISK MANAGEMENT...10 COMPANY STRATEGY...11 MANAGEMENT...12 ESSENTIAL ELEMENTS PARI INSURANCE COMPANY...13 RESPONSES ABOUT COMPANY...14 LICENSES PARI INSURANCE COMPANY...15 2

COMPANY HISTORY 1992: 3rd March Close Join-Stock PARI Insurance Company was founded. 1993: PARI Insurance Company has been transformed into Open Joint-stock Company. The temporarily license for five kinds of insurance has been received: cargo insurance; insurance of other kinds of property; insurance of financial risks; liability insurance of borrowers for nonpayment of credits; the other kinds of liability insurance. 1994: The temporarily license has been renewed on a constant. 1995: The Company has opened the first branch in Ryazan and already then has chosen a strategic line development of classical kinds of insurance, perfection of service and diversification commodity markets. Then and now the basic target group of the Company were and corporate clients are. The same year the Company has expanded the license in which the following kinds of insurance were added: endowment life insurance, individual accidents insurance, obligatory personal insurance of the passengers transported by all types of transport, homeowners insurance. 1996: The branch in Saint Petersburg was open, and the resolved kinds of insurance have been again expanded. In a portfolio of services have appeared: health insurance, insurance of means of air and water types of transport, fire-prevention insurance of property and the liability insurance of owners of motor transport. 1997: The Company achieves record successes on insurance of cargoes (gathering in comparison with the last year have grown practically three times) and for the first time enters into number 100 of the largest insurance companies of Moscow and 200 across Russia on ratings of Ministry of Finance of Russian Federation. PARI Insurance Company the same year becomes a member of the All-Russia union of insurers. 1998: The default of 1998 and the subsequent economic crisis have put a significant loss to many our clients. However the Company due to perfection of activity on work with partners and to expansion of a spectrum of services, not only has not reduced volumes of insurance operations, but has created jumping-off place for the further development. 1999: Continuing a line of development of the universal Company, in the list of services insurance upon a break in manufacture, a citizen going abroad, motor insurance has been added. 2000: On ratings Expert РА Rating agency the Company was included in number 50 of the largest insurance companies of Russia by voluntary kinds of insurance and keeps this position till now. Growth of insurance gathering more than in 2 times has exceeded parameters of 1999. The same year the paid authorized capital of the Company has been increased up to 30 million rubles. Taking into account needs of clients for new insurance services, the license for four new kinds of insurance has been received: Liability Insurance of the organizations maintaining dangerous industrial objects; liability insurance of carriers, liability insurance of erection works; liability insurance of the organizations and physical persons. 2001: The Company has kept high rates of growth - growth of insurance premiums in comparison with 2000 has made 250%. The paid authorized capital of the Company has been increased up to 70 million rubles. On insurance of cargoes PARI Insurance Company has come in the five of leaders among insurers of Russia. The license of the Company has been again cardinally expanded (15 new kinds of services) 2002: Year of the 10-anniversary of the Company, number of the resolved kinds of insurance has reached 44, and methods of promotion in the market have extended due to realization of special projects. In particular, the tender on insurance of property of uninhabited fund of has been won. Moscow, the license for insurance of the risks in state secret is received, volumes of mortgage insurance are expanded within the framework of the program of Company "Delta-Credit". For improvement of quality of service of VIP-clients the separate division has been created. Growth of gathering of insurance premiums in 2002 in comparison with 2001 has made 44%. 2003: Since July, 1 PARI Insurance Company started work from motor third-party liability insurance. The same year the largest loss for all history of existence of the Company has been settled. Payments as a result of an insurance case on insurance of cargoes have made almost 1,3 million US dollars. In November 2003 Company has received the license for 4 kinds of insurance. According to the new license given by Ministry of Finance of Russian Federation Company can be engaged: complex mortgage insurance, complex insurance of banks, insurance of oil, gas and products of their processing at transportation, insurance after start of guarantee certificates. 2004: The Management of the Company the decision on increase in the share capital up to 300 million rubles is accepted. Same year PARI Insurance Company has accepted strategy of development for the term of till 2007, determined the basic purposes and priority directions of activity of the Company. Expert RA Rating agency on results of an estimation of a financial condition and definition of a level of solvency has rated Company a rating "A" (Strong financial security characteristics). Also last year Company and reinsurance Company Munich Re has agreed upon application of the new circuit of obligatory reinsurance cargo insurance. 2005: The Company has increased volumes of activity, having concluded more than 130 thousand contracts of insurance, and having finished the sum of the annual insurance premium up to 668 million rubles. Expert RA Rating agency has confirmed the companies a rating "A" (Strong financial security characteristics). The Company has been recognized corresponding to requirements of Federal agency on the mortgage housing crediting, showed to the insurance companies participating in the state program of development of the mortgage, and has received the certificate on accreditation. The Company also has confirmed the status necessary for work under orders for the state and municipal needs, repeatedly having won open competition of the Government of Moscow on insurance of the municipal uninhabited fund which is handed over in rent. 2006: The share capital of the Company is increased up to 300 million rubles. The Company has opened new branch in Novosibirsk. On volume of received insurance premium Company has come nearer to a mark in 1 billion rubles, having collected almost 980 million rubles. Rate of annual growth has made 36% that exceeds a market level in 23%. The volume of prisoners in 2006 of contracts of insurance has exceeded 150 thousand. Expert RA Rating agency again has confirmed a rating of the Company at a level "A" (Strong financial security characteristics). 3

COMPANY TODAY Today PARI Insurance Company concerns to number 80 of the largest insurance companies of Russia. In the separate insurance submarkets, including property insurance, cargo insurance, mortgage insurance and others, the Company is one of leading insurers. Professionalism of the Company is confirmed with victories over municipal and state tenders, including on insurance of rented uninhabited fund of city of Moscow. PARI Insurance Company is full member of the Russian union of insurers, co-founder and the full member of the Russian union of motor insurers, a member of the Moscow commercial and industrial chamber, a member of National insurance guild. The Company is accredited at Federal agency on mortgage housing crediting, at Energetic committee of the Moscow area, at Association book sellers of the Union independent states. Partners of the Company on reinsurance still are the largest international reinsurance companies: Munich reinsurance company (Munich Re), SCOR reinsurance company (France), Swiss reinsurance company (Swiss Re), Hanover reinsurance company (Hannover Re) and others. Clients of the Company are the organizations and the enterprises of various patterns of ownership and areas of business : - Company "Formoza"; - Company "Kraftway"; - Group of companies "Compukink ", - The book trade house "Moscow"; - public organization Doctors without borders ; - Company "Mir", - Company TNT Express Worlwide, - Company Mr.Doors; - Network of interiors of cellular communication "Euronetwork"; - The project The Sea façade ; - Concern "Videoservice"; - International transport company "Shenker"; - Company " Ergodata "; - Forwarding company "Dostavkin"; - and many others. 4

RESULTS OF THE YEAR 4% 8% 8% In 2006 PARI Insurance Company has gathered 901,732 million rubles of insurance premiums. In view of entering reinsurance the total amount of the gathered premium has made 980,970 million rubles. The basic part (79 %) insurance premiums by property kinds of insurance - have made 779,202 million rubles, on personal insurance - 76,130 million rubles, on liability insurance - 11,803 million rubles. On obligatory motor third-party liability insurance in 2006 has been gathered 34,585 million rubles. 1% personal insurance property insurance liability insurance OMTPLI entering reinsurance 79% Pic. 1: Structure of the insurance premiums PARI Insurance Company in 2006 Insurance payments in 2006 have made 273,551 million rubles. The greatest part of payments has fallen to property kinds - 213,296 million rubles, on obligatory motor third-party liability insurance - 12,560 thousand rubles. On personal insurance it has been paid 30,024 million rubles, and on liability insurance - 8,413 million rubles. On operations of entering reinsurance it has been paid 9,258 million rubles. 3% 5% 3% 11% personal insurance property insurance liability insurance OMTPLI entering reinsurance 78% Pic. 2: Structure of the insurance payments PARI Insurance Company in 2006 The largest payments PARI Insurance Company for 2006 02.08.06 1,2 million dollars - for the stolen cargo In handling time computer and office equipments in the center of Saint Petersburg there was an armed assault as a result of which the cargo has been stolen. 05.06.06 12, 135 million rubles - for the burned down cottage The size of payment has made 12, 135 million rubles. As a result of an insurance case the cottage on Highway Rublevskoe has burned down. According to investigation, the fire has taken place as a result of short circuit of posting. 15.05.06 3,2 million rubles - to jewelry shop PARI Insurance Company has paid 3,2 million rubles to jewelry shop in Moscow. The shop which is settling down in city centre has been plundered by the armed malefactor. 16.05.06 2, 235 million rubles for stolen the car PARI Insurance Company has paid 2, 235 million rubles for stolen Range Rover Voque. 10.05.06 1,949 million rubles for the stolen cargo As a result of roguish actions on the part of a carrier the cargo for the sum 1,949 million rubles has been stolen. PARI Insurance Company has carried out payment at a rate of cost of the stolen cargo. 5

INSURANCE ACTIVITY DYNAMICS The growth rate of the insurance premium gathered in 2006, concerning 2005 has made 36%. Thus excess of growth of all market of insurance makes about 23%. 1000,000 900,000 901,732 For last 4 years the annual volume of the gathered insurance premium has grown more than in 2 times. million rubles 800,000 700,000 600,000 500,000 400,000 438,683 462,214 667,714 300,000 200,000 100,000 0,000 2003 2004 2005 2006 Pic. 3: Changes of the insurance premiums PARI Insurance Company for 2003-2006 300,000 264,293 250,000 200,000 164,373 million rubles 150,000 100,000 130,435 129,955 50,000 0,000 2003 2004 2005 2006 Pic. 4: Changes of the insurance payments PARI Insurance Company for 2003-2006 6

COMPANY RATING In 2006 Expert RA Rating agency has confirmed the rating of reliability of PARI Insurance Company at a level A. On the basis of the lead analysis of a level of solvency and financial stability the Company is carried to a rating class A "Strong financial security characteristics". The agency notes a high level of management and business culture of the Company, positive dynamics of the basic financial parameters, stably high parameters of a level of liquidity and solvency, stability and diversify of the insurance portfolio, high quality of insurance services, suspension of tariff policy and conformity of formed insurance reserves to statistics of payments. Certificate Expert RA Rating agency has rated PARI Insurance Company. Rating A Strong financial security characteristics. In short-term outlook the Company will most likely carry out all its financial commitments in time, both current and arising from its insurance activity. In medium-term outlook the probability of commitments fulfillment depends soundly on stability of macroeconomic indicators and industry (insurance market) indicators. Market positions According to the Ministry of Finance of Russian Federation in 2006 PARI Insurance Company has entered into number 80 of the largest insurance companies of Russia (77 position). Besides it PARI Insurance Company has entered into the following ratings (according to Expert RA Rating agency): Ratings 2006 (6 months) 2005 All kinds of insurance ТОР-70* ТОР-85* Property insurance ТОР-50* ТОР-65* Cargo insurance ТОР-10 ТОР-15 Motor insurance ТОР-35 ТОР-40 Health insurance ТОР-45 ТОР-45 Insurance leaving abroad ТОР-20 ТОР-20 Accident insurance ТОР-35 ТОР-40 Size of actives ТОР-40 ТОР-50 Largest payments ТОР-20 ТОР-45 * According to the Ministry of Finance of Russian Federation 7

FINANCIAL STATEMENTS In comparison with 2005 assets of Company in 2006 have increased for 22,5% and have made 1,094 billion rubles. 1200 892,919 1054,905 1000 million rubles 800 600 400 519,861 200 0 2004 2005 2006 Pic. 5: Changes of assets PARI Insurance Company in 2004-2006 The size of insurance reserves has increased in 2006 in comparison with 2005 for 31,7%. The reserve unearned premiums has made 267,391 million rubles, a reserve insurance payments - 249,659 million rubles. 500 450 400 392,661 470,284 million rubles 350 300 250 200 245,831 150 100 50 0 2004 2005 2006 Reserve of insurance payments Reserve of insurance payments Pic. 6: Changes of reserves PARI Insurance Company in 2004-2006 As of 01.10.2006 own capital of Company has made 326,798 million rubles. 350 300 341,655 The size of the authorized capital is increased up to 300 million rubles (70 million rubles in 2005). 250 million rubles 200 150 100 84,281 84,786 86,022 96,266 50 32,029 0 2001 2002 2003 2004 2005 2006 Pic. 7: Changes of own capital PARI Insurance Company of 2001-2006 8

REINSURANCE THE POLICY Within 2006 at realization of the current activity, no less than at formation reinsurance strategy the next year, PARI Insurance Company still strictly chooses partners, trusting interest s protection only to those companies, the reputation and which reliability does not cause doubt. At the end of 2006 the obligatory contract has been renewed concerning insurance of cargoes which capacity has made 3 000 000 USD. Successful development of a portfolio has allowed to increase the size of own deduction Company. The leader under the contract of reinsurance has not changed is Munich Reinsurance Company (Munich Re). Also in the contract participates Swiss Reinsurance Company (Swiss Re), also being one of the largest international overcautious persons. The limit of the obligatory contract of reinsurance of property risks which alongside with property risks covers also insurance construction risks, makes 7 500 000 USD. Participants of this contract are such large European companies, as Hanover Reinsurance Company (Hanover Re) and French Company SCOR. One more obligatory contract placed in the Russian market, protects complex mortgage insurance, switching section of insurance of property, a life and health of the borrower, and also title insurance. At the end of 2006 the contract has been renewed with capacity of 15 000 000 rubles on each section. All risks which are exceeding own deduction PARI Insurance Company and not getting under action of obligatory protection, are reinsured individually. As partners at such reinsurance, besides participants of obligatory contracts, the large foreign and Russian companies act. 2006 is remarkable by the several new and interesting projects demanded by serious work above maintenance appropriate перестраховочной protection, including the most complicated technical risk with the insurance sum about 400 000 000 USD. Making use of the saved up experience and in cooperation with leading world and Russian overcautious persons and brokers, reinsurance covering of this risk has been provided. Besides protection of own portfolio, Company accepts risks of other companies in reinsurance. Among our partners not one ten Russian insurance companies, to which services both our own opportunities, and indirect section of obligatory contracts of reinsurance of property and cargoes. 9

POLICY OF RISK MANAGEMENT PARI Insurance Company conducts activity within the framework of classical kinds of insurance in which realization there is a long experience - both at Company, and in practice of domestic and foreign insurance. In turn, at formation of prevailing shares in an insurance portfolio the preference is given directions of property insurance, such, for example, as insurance of property of organizations, insurance of cargoes and to the other kinds characterized concerning low unprofitability, steady enough probabilities of approach of "ordinary" and catastrophic insurance events, good susceptibility to forecasting of results in long-term prospect. In a policy underwriting, that is in selection of the risks accepted on insurance, Company adheres to two basic principles: 1. Estimation of risk under many factors, comprehensive investigation of a structure of the risk accepted on insurance. 2. Adequacy of the brave insurance premium to an insurance covering of risk. Company spends permanent monitoring unprofitability in a sections of insurance subportfolios, in a sections of client segments and on each client. On the basis of the analysis of results the Company operates a level of insurance tariffs, volumes of standard and individual insurance coverings. The multifactorial tariff systems are used, allowing to establish the insurance premium adequate to an individual structure of each risk of insurance; systems of bonuses and discount, clients taking into account insurance history are used. Company supports the balanced insurance portfolio, being guided by the following principles: - to avoid domination of shares of separate directions of insurance; exception the most highly remunerative directions of insurance with good prognosis can make only developments; - to avoid a concentration on service only separate client groups (segments); the insurance portfolio of Company will consist of contracts of insurance of mass homogeneous risks, and also from contracts of insurance of interests of the enterprises, the organizations, businessmen of various branches; exception also can make only most profit client segments. In a policy of management of financial risks, in particular, at management of insurance reserves, Company adheres to principles diversification and reliability of investments, a reflexivity and liquidity according to the rules installed by the state on behalf of the Ministry of Finance of the Russian Federation. Company operates risks of strategic development according to the accepted plan of strategic development. As a control system, statement of the purposes of Company and realization of strategy the Balanced System of Parameters (Balanced Scorecard) has been elected. 10

COMPANY STRATEGY PARI Insurance Company has put before itself of 30 priority strategic purposes. These purposes lay in spheres of the finance, economy, mutual relations with the market, with clients and the personnel, and also in the field of carried out by Company business-processes. All purposes are measured and strictly controllable; each purpose the indicator and scheduled target parameters is appointed to the nearest years. By development of the strategic plan Company used a method of the balanced strategic parameters (Balanced Scorecard). In group of the strategic purposes in areas «Finance and Economy» Company, besides others, has included escalating own means, repeated excess of a level of financial reliability and solvency above market level, optimization of a level of costs and other. Within the framework of the purposes of the block «Market and Clients», Company is going to increase a share of new clients. Company will achieve also increase of increase in number of constant clients. Among other purposes - increase in shares of Company in the separate submarkets of insurance, increase of a level cross-marketing and others. In the block of the purposes «Business-processes» - improvement of quality underwriting, automation of processes on servicing, translation of a corporate control system by mutual relations with clients (CRM) on higher levels, etc. «Infrastructure and Employees» are included in group of the strategic purposes such purposes, as increase in labor productivity, achievement of conformity of system of motivation and stimulation of work to the put strategic tasks, etc. The choice of the strategic purposes according some strategic positions of Company, including the following: 1. Our clients should receive all services necessary to them. Company aspires to rendering to clients of maximum full spectrum of insurance services. The task of Company - to offer clients all insurance products, best-selling consumers. 2. We render our clients the special, differentiated services. Company aspires to offer clients insurance both service services and the products favorably distinguished from services and products of competitors. 3. Development of the new markets - new opportunities for growth. Company leaves and will leave on the appearing or not mastered markets of insurance. Thus Company will follow principles of orientation to differentiation of services, on formation of reliable structure of an insurance portfolio. 4. Each realized large project - a significant step forward. The society participates in the large insurance projects distinguished by "scope" of the big number of insurants, the big number of objects or insurance of especially large objects. 5. The reliable, balanced insurance portfolio - a pledge of stable development. Company will continue formation of reliable structure of an insurance portfolio. Portfolio of insurance contracts will be filled with domination of property insurance. 6. Development of Company is impossible without professional growth of employees. PARI Insurance Company stakes on professionalism of the employees. 11

MANAGEMENT Kudryakov Alexander Michailovich the general director Higher education, the Moscow State University of a name of Lomonosov In PARI Insurance Company works since 1992 Sulavko Alexei Georgievich the assistant to the general director Higher education, the Moscow State University of a name of Lomonosov In PARI Insurance Company works since 1992 Chumak Irina Ivanovna - the assistant to the general director, the head of insurance department Higher education, the Moscow State University of a name of Lomonosov In PARI Insurance Company works since 1994 Pavlova Oxana Vladimirovna the assistant to the general director, the head of financial department Higher education, the Moscow State University of a name of Lomonosov In PARI Insurance Company works since 1994 Timerova Anna Rimovna the executive director Higher education, the Moscow State University of a name of Lomonosov In PARI Insurance Company works since 1995 Vezoyalk Michael Ivanovich Saint Petersburg branch director Shrainer Jury Arvitovich Ryazan branch director Zozulin Eugeny Victorovich Novosibirsk branch director 12

ESSENTIAL ELEMENTS PARI INSURANCE COMPANY PARI Open Joint-stock Insurance Company Legal address: 119415, Moscow, Vernadsky's prospectus 37 Post address: 119415, Moscow, Vernadsky's prospectus 37 Phone: 431-01-00, 431-01-01 Fax: 131-51-29 E-mail: ic@skpari.ru Internet: www.skpari.ru PARI Insurance Company braches Saint Petersburg 195272, Malouohtincky s prospectus 68, 224 office Phone: (812) 325-06-02 Ryazan 390027, Popova street 19/43 Phone: (4912) 24-05-68 Novosibirsk 630049, Zyr yanovskaya street 55 Phone: (383) 266-19-40 13

RESPONSES ABOUT COMPANY 14

LICENSES PARI INSURANCE COMPANY Ministry of finance Of Russian Federation License 4483 D With rights to insurance and reinsurance activity is given to insurance company PARI Open Join-Stock Insurance Company Legal address: 119415 Moscow, Vernadsky prospectus, 37 Insurance kinds: In personal insurance: Voluntary accidents insurance Obligatory accidents insurance Voluntary health insurance In property insurance: Voluntary motor insurance Voluntary air transport insurance Voluntary water transport insurance Voluntary cargo insurance Voluntary other property insurance Voluntary financial risks insurance In liability insurance: Voluntary motor third-party liability insurance Voluntary carrier s liability insurance Voluntary liability of the organizations maintaining dangerous industrial objects insurance Voluntary professional liability insurance Voluntary other liability insurance This license takes effect only at Russian Federation territory. Reinsurance. Assistant of minister M.A. Motorin Registration number 915 March 26, 2004

Ministry of finance Of Russian Federation License 4460 D With rights to insurance activity is given to insurance company PARI Open Join-Stock Insurance Company Legal address: 119415 Moscow, Vernadsky prospectus, 37 Insurance kinds: In liability insurance: Obligatory motor third-party liability insurance This license takes effect only at Russian Federation territory. Assistant of minister S.D. Shatalov July 15, 2003 Registration number 915 16